Slaughter and May advised Interserve plc in relation to the development and implementation of its deleveraging plan, which culminated in the pre-packaged administration sale of the business and assets of the group to a newly-incorporated company owned by the group’s existing lenders on 15 March 2019.
Interserve is one of the world’s foremost support services and construction groups, with gross revenues of circa £3.2 billion and a workforce of circa 68,000 people worldwide.
On 27 February 2019 Interserve announced the terms of its deleveraging plan, which had been agreed with the group’s lenders, bonding providers and Pension Trustee but was conditional upon obtaining shareholder approval. The deleveraging plan involved a placing and open offer of new shares, a reduction of the group’s existing debt by approximately £485 million through the proceeds of the open offer being applied in prepayment and the conversion of debt into new shares and the provision of additional liquidity to the group through a £110 million new debt facility.
At a General Meeting of Interserve plc’s shareholders on 15 March 2019, the resolution relating to the deleveraging plan was not passed. As part of an alternative transaction to restore the group’s balance sheet, Interserve plc applied to court to be placed into administration on the same day and the administrators, following their appointment, immediately sold the business and assets of the group to a newly-incorporated company owned and controlled by the group’s lenders. This allowed the group to complete a deleveraging that achieved the same commercial principles as the deleveraging plan, including the reduction of existing debt and provision of additional liquidity. Since none of Interserve plc’s subsidiaries were involved in any insolvency process, the group was able to provide continuity of service for its customers and suppliers and to protect the position of employees and members of the group’s pension schemes.
The Slaughter and May team was led by restructuring partner Ian Johnson and financing partner Azadeh Nassiri, together with financing partners Susan Hughes and Andrew McClean. They were supported by an associate team which included Samyuktha Rajagopal, Samay Shah, Stephen Blair, Tim Newey, Josh Bauernfreund, Matt Hollinshead, Ben Isherwood and Zhen Lim. Tax advice was provided by tax partner Dominic Robertson with support from associate Jamshed Bilimoria. Pensions advice was provided by pensions partner Sandeep Maudgil with support from associate Chris Sharpe and Akshay Chauhan. Support on dispute resolution matters was provided by associate Ella Williams.
Slaughter and May, as restructuring and financing counsel, worked as part of an integrated team with Andy McDonald and the rest of the in-house legal team at Interserve and a corporate team at Ashurst. N M Rothschild & Co acted as the group’s financial adviser in connection with the restructuring.