Interserve is set to extend its cash borrowing facilities to £834m, after agreeing a new refinancing package with lenders totalling nearly £300m.
The firm announced yesterday that it had reached an agreement in principle with its lenders and other financial stakeholders to access additional cash facilities of £196.6m, plus bonding facilities of up to £95m.
The new facilities mature in September 2021.
At the same time, the company’s existing debt has been amended to mature at the same time as the new facilities.
It means that Interserve will have cash borrowing facilities of £834m immediately following the refinancing, running up to September 2021, provided all Interserve’s lenders approve the new arrangement.
Meanwhile, the banks providing the new cash and bonding facilities will have the opportunity to buy shares in Interserve at a nominal price of 10p per share, giving them a 20% stake in the company.
Pricing on both of the new facilities as well as the existing debt and bonding facilities have also been renegotiated as part of the deal.
Under the new terms Interserve will pay around £56m in interest on its debts in 2018, of which around £34m will be cash interest.
The increased cost of the bonding instruments already issued will be around £3.2m, of which the cash impact is expected to be “less than £1m”.
Debbie White, Interserve’s chief executive, said: “Today’s announcement is a significant milestone for Interserve and a major step in securing a firm financial platform to underpin the Group’s future.
“We are encouraged by the support from our lenders in respect of these new facilities, which will allow the new management team to execute our business plan, focused on delivering a great service for customers, driving growth and restoring value.”
