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Interserve: Carillion Part II

Paul Hodgson | March 19, 2019

In an almost carbon copy of the Carillion collapse, peer contracting firm Interserve went into administration on Friday due to a majority of its shareholders rebelling against a debt cancellation deal that would have seen their investment at even lower levels than the deal that was finally agreed to.

A different deal, however, went through that meant that £485 million (U.S. $640.2 million) of existing debt, and an injection of £110 million (U.S. $145.2 million) of new credit into the company, led to the company being “sold” to a group controlled by its creditors. The transaction resulted in the company’s largest shareholders—including U.S. hedge fund Coltrane, which voted against the debt cancellation deal—seeing their holdings massively diluted. On the other hand, about 16,000 small shareholders are thought to have lost almost their entire investment.

While there were unconfirmed rumours that the Government was contemplating taking the company into public ownership—...

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