County council contractor teetering on the edge of administration
PUBLISHED: 09:17 15 March 2019 | UPDATED: 13:45 15 March 2019
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A huge government contractor, Interserve, is facing a government vote today which could see the company plunged into administration.
Interserve, which carries out fire and care home services in Norfolk, is trying to persuade its shareholders to back a rescue deal which would see 95% of the firm transferred to lenders.
Interserve has a nursing agency in Hethersett, as well as a fire services office in Norwich’s Hall Road.
The deal is aimed at slashing the company’s £650m debt mountain, which would be achieved in a debt-for-equity swap.
If approved, existing investors would see their holdings slashed to 5% and lenders such as RBS, HSBC and BNP Paribas seize control of the remaining equity.
However, both central and local governments have confirmed that if the deal were to fall through a Carillion-style collapse would be avoided.
Carillion, a British outsourcer which collapsed in 2018, cost the taxpayer at least £148m.
Central government put Interserve under supervision 18 months ago, and has insited that there is a plan to save the company, even if the deal on the table is rejected.
Norfolk County Council has offered similar mitigation for the impact of the news.
In December 2018, the council said it had “contingency arrangements” should the company go bust.
In this county, Interserve only serves 12 customers - according to the latest CQC report.
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At the time, the council said: “Interserve Healthcare is one of the providers on our home care framework and provide a very small number of hours of home care to several customers.
“We continue to monitor the position with Interserve to ensure that people’s needs continue to be met. More widely, the council has contingency arrangements in place in the event of provider failure to ensure that we can step in and protect key services to individuals if providers are no longer able to deliver them.”