Interserve plunges as investors panic

The rout of Interserve’s bombed-out shares intensified on Monday as the firm said restructuring its debt would hammer investors.

Shares in the company tanked nearly 60% — down 14.25p to 10.25p — after it admitted that a likely debt-for-equity swap of its £600 million-plus borrowings “could result in material dilution for current Interserve shareholders”. Shares in Interserve, whose contracts include back-up services for the Metropolitan Police on demonstrations and ceremonial occasions, have plunged 90% this year.

Chief executive Debbie White said the firm has the backing of its lenders, who are being advised by EY and Lazard. She said: “The deleveraging plan will give Interserve a strong long-term capital structure and provide a solid foundation.” Outsourcers and their balance sheets have been under intense scrutiny since the collapse of Carillion in January.

On Sunday, the business said it was "making good progress" on a recovery plan. The Government has said it supports its strategy.