Interserve schemes saved after sponsor pre-pack
Interserve's numerous defined benefit (DB) schemes have retained a sponsor link after the company entered into administration and was sold.
Shareholders last week rejected a rescue plan which would have seen around half of the beleaguered contractor's debt cancelled with additional funds lent in return for a majority stake in the business.
The shareholder rebellion was led by US hedge fund Coltrane, which partnered with hedge fund Farringdon and a handful of small shareholders to deny permission for the plan which would have seen total shareholders' stake reduced to 5%.
The company's plan was backed by its pension scheme trustees.
As a result, the company filed for a pre-pack administration, and all assets were moved to a new company, Montana 1, in a bid to facilitate the original plan, leading all shareholders to lose their stake.
The company has, however, confirmed all pension schemes and their benefits will retain the link with Montana, which will soon be renamed as Interserve Group.
In a statement, group chief executive Debbie White said: "With a stronger financial platform in place, Interserve will be able to concentrate on delivering value for our customers."
She added the company was "fundamentally a strong business".
"With a competitive financial platform in place, we see significant opportunities ahead as a best-in-class partner to the public and private sector."
The continuing commitment to the pension schemes comes in stark contrast to recent pre-pack administration events where DB schemes have been pushed into the Pension Protection Fund (PPF).
Last year, publishing firm Johnston Press saw its DB scheme enter PPF assessment after a pre-pack deal, just 48 hours before a scheduled contribution to the scheme. The arrangement caused a probe to be launched by The Pensions Regulator, although this has now ended with no action.
Interserve's DB schemes had a combined IAS 19 surplus of £93.9m as of 31 December last year, and a funding level of 111.1%. The situation will likely be different on an individual scheme level, and also on a PPF benefits basis.
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