Interserve on brink of administration.
James Salmon, Operations Director, 11th March 2019.
Government outsourcing firm and construction group Interserve is likely to go into administration this week, with company directors saying the firm has a “mountain to climb” to avoid being toppled by its £630m debt burden.
The chain is hoping to alleviate cost pressures with a proposed deal to sell new shares. The rescue deal has been met with contention however and as a result is not certain to be accepted by shareholders. Main stakeholder Coltrane Asset Management is vociferously opposing the deal as a “terrible” proposal that would decimate investor value. Indeed, even the outsourcer’s proxy advisor Institutional Shareholder Services – which supports the plan – has acknowledged that the financing package is “not without concern for the shareholders.” Second proxy adviser Pensions and Investment Research Consultants has also come out in support of the rescue deal, “in light of [its] given necessity.” A vote on the package is scheduled for the 15th March.
EY lined up for take-over
EY has been lined up to advise Interserve if the company goes into administration, with administrators likely to sell the company for a nominal amount to its current lenders, who will then most likely sell the business off in units. The loss of underlying contracts and jobs is currently not foreseen by the board of the company, which employs 45,000 workers in the UK, including at the NHS and Foreign Office.
Outsourcer’s collapse echoes Carillon
According to company data, 70% of Interserve’s £2.9bn annual turnover comes from the government. The company’s near collapse reignites criticism for the outsourcing business model, which has faced scrutiny in recent years. The fall of giant private construction company Carillon last year in particular has underlined concerns regarding the use of private providers to fulfil contracts for public services and the poor financial practices this encourages — as companies engage in suicide bidding to secure big contracts, despite also having to pay large salaries.
Just as with the fall of Carillon, the collapse of a major outsourcer like Interserve would likely have a significant ripple effect for smaller business in the industry. To manage and mitigate the risks of an insolvency domino-effect, suppliers and other companies should seek professional credit management advice to strengthen their balance sheets and provide ample cushioning against potential loss of income posed by late client payments and broader market disruption.
Do you need a cash rescue?
Your business might need a cash rescue like Interserve but your options don’t match those of the conglomerate.
Rather than running to banks and investors, do you realise you may have a hidden source of capital within your business waiting to be activated?
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and underused legislation your business could be due huge amounts in compensation that you didn’t even know about.
That compensation could be the cash rescue your business needed.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hardwork. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cashflow.
Don’t et your bankers control you, contact CPA today.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply to restaurants, help us help you identify the risks.
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
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For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
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