One of the UK’s biggest government contractors, Interserve, could fall into administration following a crucial shareholders vote today (Friday).
If the vote is backed by shareholders, 95% of the company would go to lenders in avoid to avoid collapse.
If Interserve’s shareholders reject the offer, the company’s owners will apply for a ‘pre-pack’ administration, which allows it to sell itself or assets without affecting the day-to-day operations. Administrators will take control of both the ownership and running of the business.
It comes months after Carillion, another major infrastructure firm operating contracts for the UK government, collapsed with £1.5 billion worth of debt.
Interserve has racked up debts of £650 million as a result of delays to various projects. The deal on offer shareholders would see new shares sold to cut its debt to £275m.
General secretary of the RMT Union, Mick Cash, called for the government to bring major public contracts in-house, such as a £35m cleaning contract with Network Rail, in order to “avoid a repeat of the Carillion chaos”.
He added: “Once again we see the reality of bandit capitalism and its toxic impact on our public services. The time has come to end this obsession with the private sector speculators and return to the principles of public services run and owned by the public, free from this corrosive nonsense.”