Written by: Keith Tully
Published: 14th November 2018
Interserve, the construction and support services outsourcing company, is believed by some to be on the verge of collapsing into insolvency.
A former big shareholder of the company has told the BBC that its situation could be moving quickly towards insolvency and the potential collapse of what is a multi-billion pound operation with tens of thousands of employees.
“We could be looking at another Carillion,” the BBC’s unnamed source is quoted as saying.
Carillion, formerly one of the leading construction and facilities management companies in the UK, fell into administration in January 2018 and was subsequently liquidated.
The now non-operational company’s collapse had hugely significant financial consequences for thousands of other construction sector businesses and is believed to have contributed to a notable uptick in the number of insolvencies in the industry over the course of this year.
Interserve has seen its publicly traded shares fall sharply in value in recent days to a 30-year low amid rumours of a squeeze on the company’s finances.
However, sources have given differing stories to the BBC in relation to the issue, with some saying that investors will be asked to and able to put forward the fresh capital required to keep Interserve solvent.
On the other hand, another unnamed source has warned the BBC that the situation is very serious and financially perilous for the outsourcing giant.
“I don’t see how they can raise the £500 million or so needed,” he is quoted as saying. “The management team and its track record is not good enough to make a case for investing new money.”
Any suggestions that another major construction sector company could be close to collapse will be highly worrying for operators across the industry and throughout the country.
In recent weeks, figures from the accounting firm Moore Stephens showed a near 20 per cent increase in the number of construction sector insolvencies between the final three months of 2017 and the first three months of 2018.
That jump is believed to have been largely a consequence of Carillion’s collapse into insolvency and entry into liquidation in the early weeks of this year.