Contractor’s shares dive again as it confirms it is in ‘constructive and ongoing discussions’
Shares in Interserve slid more than 5% this morning after the contractor admitted it was in talks with its lenders, a month after it revealed it would have to increase provisions to cover loss-making energy-from-waste contracts.
In a statement to the Stock Exchange this morning, Interserve said it was “engaged in constructive and ongoing discussions with its lenders”.
Work was “underway to provide greater clarity on Interserve’s current trading and Energy from Waste provision, provided in the 14 September update announcement”.
A further announcement is expected “in the coming days”, it added.
The group has not responded to suggestions it has hired business rescue specialists EY.
Last month in a trading update Interserve announced it was increasing the amount it was setting aside for its EfW deals from £90m to £160m. But the firm’s chief executive Debbie White (pictured), who joined the group at the beginning of September, admitted that this figure will not be enough.
Investors promptly dived out of the stock, sending Interserve’s shares down 53%.
The firm originally said in May 2016 that the cost of pulling the plug on the energy-from-waste sector would be £90m. It was then forced to revise this figure up to £160m, earlier this year.
In its statement last month, the firm said “the anticipated timing and complexities of completion [of energy-from-waste contracts] mean that the board now considers it is likely that the final costs will significantly exceed the £160m currently provided”.