Interserve may be forced to sell-off parts of its business to account for pre-tax losses of £244M.
Shares in the firm, which employs 80,000 people world wide, have plummeted by 13 per cent this morning following the publication of its 2017 financial report.
Industry analysts are now predicting that Interserve could sell its international support services and construction divisions in order to recoup funds.
Analysts at Liberum said: “The balance sheet needs addressing and we expect that will be achieved by a mixture of disposals and a rights issue. The company may need either to raise £340M from investors or to raise £185M and to sell off its international support services and construction divisions.”
Interserve said that pre-tax losses of £244M were due to margin pressure on contracts for the British government and a £217M loss on a deal building waste to energy plants.
Interserve group chairman Glynn Barker described the latest financial report as “extremely poor”.
He said: “The turmoil of the past 16 months is behind us, but the hard work is not. We have made good progress in dealing with the challenges of progressing our exit from energy from waste but significant risks clearly remain.”
“Significant” losses were predicted earlier this month, after Interserve asked shareholders to approve an extension of its borrowing limit.
The company signed off on a last-ditch rescue package with its lenders including HSBC, Lloyds, RBS and Barclays on Friday to avoid another Carillion-style collapse.
The company’s chief executive Debbie White implemented a transformation plan in October, aimed at saving Interserve £15M this year.
White cited “purchasing practices, the organisational design and the cost choices made” in the past as reasons for the current financial crisis.
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