Interserve
In its announcement, the global support services and construction company has stated that it continues to be in "constructive discussions with its lenders, who are fully supportive of Interserve's business plan and management team", with the key commercial principles on which the Deleveraging Plan is expected to be based "conditionally agreed " between Interserve and all lenders.
Interserve PLC (LON:IRV) has agreed on the key terms of a rescue deal with lenders after struggling under a £500mln debt pile.
Interserve shares, which have dropped almost 90 percent this year as it struggled with a weak construction market and more than 600 million pounds in debt, were down 3.4 percent at 10.7 pence at 0941 GMT as early gains evaporated.
The Government contractor - which holds crucial contracts for services in prisons, schools and hospitals, has borrowings of more than £600million.
Interserve said it would also weigh up proposals from some of its lenders to hive off its profitable building materials business, RMD Kwiform, with the banks taking ownership.
"The company successfully raised new debt facilities earlier this year and we fully support them in their long-term recovery plan".
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Debbie White, chief executive of Interserve, said: "This progress on the Deleveraging Plan is excellent news for all our employees, customers and suppliers".
It also includes a deal to defer its first debt payment due at the start of February to the end of April.
'It will provide us with a strong balance sheet and enable us to move forward with confidence and the ability to improve our business and deliver our long-term strategy, ' she added.
Today's update adds a new leverage target, presumably imposed by its lenders, of less than 1.5-times net debt to EBITDA (earnings before interest, depreciation and amortisation). Following fellow outsourcing company Carillion's collapse in January, which led to thousands of job losses, several firms serving the public sector has taken a hit.
Interserve announced a fortnight ago that a large part of its bank debt would be converted into equity, which would reduce its leverage ratios but heavily dilute existing shareholders.
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