Interserve PLC Update on financing and debt covenants (2772Z)

TIDMIRV

RNS Number : 2772Z

Interserve PLC

13 December 2017

News Release

13 December 2017

UPDATE ON FINANCING AND DEBT COVENANTS

Interserve is pleased to announce that it has secured additional short-term committed funding for the Group. In addition, we have reached an agreement to defer the test date for compliance with our loan covenants to 31 March 2018. This provides a platform for continued constructive discussions with the Group's lenders, with a view to securing its longer-term funding.

The additional facilities totalling GBP180m comprise a GBP38m committed revolving credit facility, GBP37m of committed ancillary facilities, committed bonding facilities of GBP93m plus GBP12m of additional funding available by agreement with the lenders. The facilities expire on 30 March 2018.

In order to obtain these facilities, Interserve has agreed to close out its cross-currency swaps, which hedge exchange rate exposure on existing US Private Placement loan notes. The proceeds generated by closing out the swaps of approximately GBP44m will be used to repay existing borrowings from current bank facilities. Unwinding the accounting for the sterling value of the debt and the associated offsetting swap transactions will increase net debt by approximately GBP10m.

In September, we launched a group wide performance improvement plan, Fit for Growth, aimed at improving cash and margin performance. As part of this plan, we initiated a series of work streams to address our operating model and the cost base of our operations, as well as ensuring that we are operating in market segments which are both profitable and offer opportunity for growth. We will make further announcements about the output of these work streams in due course and it will form an integral part of the discussions with our lenders in respect of the longer-term financing of the Group.

Debbie White, Interserve's Chief Executive, said:

"Securing these agreements puts Interserve on a firmer footing. Whilst there is still much to do, Interserve has significant opportunities based upon a strong client base and our dedicated employees. There is considerable potential for business improvement across the Group. These short-term committed borrowing facilities, together with the ongoing work to clearly define the strategy and commercial structure for the business going forward, will bring further stability and clarity for our clients, our people and our shareholders."

Ends

For further information please contact:

   Robin O'Kelly, Director of Communications                    [phone] 
   Rhys Jones, Head of PR, Interserve                              [phone] 
   Michael Kinirons, CNC Communications                         [phone] 

This announcement contains inside information

LEI: 549300MVYY4EZCRFHZ09

Classification: Inside information

About Interserve

Interserve is one of the world's foremost support services and construction companies. Our vision is to redefine the future for people and places. Everything we do is shaped by our core values. We are a leader in innovative and sustainable outcomes for our clients and a great place to work for our people. We offer advice, design, construction, equipment, facilities management and frontline public services. We are headquartered in the UK and listed in the FTSE. We have gross revenues of GBP3.7 billion and a workforce of circa 80,000 people worldwide.

www.interserve.com

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December 13, 2017 10:58 ET (15:58 GMT)