Mark Whitehead 18 March 2019

Interserve handed £660m of contracts before going into administration

Interserve handed £660m of contracts before going into administration  image

Construction and facilities giant Interserve was handed £660m of public sector contracts before it went into administration last week, market experts have revealed.

The company was taken over by administrators last week after shareholders rejected a rescue plan and immediately shifted to a company controlled by its lenders.

It meant that Interserve could avoid a Carillion-style collapse, though investors have seen the value of their shares wiped out.

The lenders who are now in control of Interserve Group include banks RBS and HSBC, and investors Emerald Asset Management and Davidson Kempner Capital.

The company says it is 'fundamentally a strong business and with a competitive financial platform in place'.

Figures from market analysts Tussell show last year local authorities awarded Interserve 16 contracts worth £61m – an increase from seven contracts worth £17m in 2017 – despite the company announcing a series of profit warnings.

Tussell says Interserve currently has 11 live contracts with UK councils worth an estimated £50m.

National secretary of the GMB union Rehana Azam said the Interserve case showed how 'obsessed' with outsourcing the Government had become.

She said: 'Awarding hundreds of millions in taxpayer funded contracts to troubled outsourcing companies is the height of irresponsibility – ministers have still not taken on board the lessons from the collapse of Carillion.'

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