Top Interserve shareholder threatens to sue outsourcer over ‘terrible’ rescue deal
Interserve's hopes of appeasing rebel shareholder Coltrane Asset Management with an amended rescue deal have been dashed, with the hedge fund instead threatening to start legal proceedings against the firm.
As it announced its full-year results, the outsourcing giant this morning updated its rescue refinancing deal, giving shareholders five per cent of its total value, up from 2.5 per cent proposed earlier this month.
Read more: Interserve rescue deal in trouble as shareholder rebellion grows
The move appeared to be a bid to quell anger at lead shareholder Coltrane, which had previously railed against Interserve for trying to wipe out its shareholders.
But in an excoriating attack this afternoon, a source close to the US fund accused the firm's lenders of "holding a gun to its head and pushing it into insolvency", slamming Interserve's updated rescue deal as "terrible".
"If this goes the way being threatened [Coltrane] will be commencing litigation and have engaged specialist counsel to lead claims against the board and lenders," they told City A.M..
Coltrane believes lenders have "acted as shadow directors throughout the process," they added.
The source said Interserve had deliberately stopped Coltrane from helping it break free of the financial turmoil which has gripped the outsourcer in recent months.
They said even today Interserve had refused to provide Coltrane's advisors with "basic requested information then has the gall to use our request to do diligence as reason for saying our proposal is not capable of implementation,” they said.
“This self-serving, self-preserving behaviour is part of a pattern demonstrating how truly failed they are in their fiduciary obligations to shareholders.”
The source continued by accusing Interserve’s advisors of “strangling” the company. Interserve will have paid its financial advisors, who include Rothschild, £76m by the time the rescue deal is complete, if all goes to plan. The firm’s market value as of this morning was just £26m.
Read more: Interserve directors face revolt as rescue deal unveiled
“Instead of using [the cash] on much needed capex the same advisors which presided over Carillion are again sapping the company of cash,” the source claimed. “This is and was all avoidable.”
They added Coltrane has a plan, and wishes to "lead a rescue and has been prevented from doing so".
City A.M. has approached Interserve for comment.