Interserve receives new debt proposal from Coltrane

Interserve said it has received and is considering an "outline proposal" from major shareholder Coltrane Asset Management, while reports suggest the company's lenders will improve the terms of its rescue plan.

Earlier this month, the construction and support services group said key terms of a plan to cut its £625m of debt has been agreed with all of its lenders, bonding providers and pension trustee, resulting in current shareholders owning just 2.5% of the business.

Coltrane, a New York-based hedge fund that has built a 17% stake in Interserve, was not happy with the proposed deal and on the same day the plan was announced, called for an extraordinary general meeting of the company where it proposed removing the group's chairman, finance director and most of the rest of the board in an effort to derail the plan.

Interserve said in a statement on Friday that it now expects that to publish shareholder documents next week, including the notice of a general meeting where it will seek shareholder approval for the debt plan as well as the documents setting out the full terms of the plan.

Meanwhile, lenders have been in talks about doubling the proportion of Interserve's equity that would be owned by its existing shareholders post-rescue to 5%, Sky News reported, with some major investors said to be supportive.

Coltrane's new proposal, Sky added, includes a £75m rights issue to be fully underwritten by the hedge fund, with creditors owning 65% of Interserve and the new funds raised in the rights issue equating to 25% of the equity, while existing shareholders would own 10%.