Sky News has reported that struggling Interserve is considering selling RMD Kwikform.
In a report over the weekend, Sky News said it had learnt that Interserve were examining a plan to hand RMD Kwikform to its syndicate of lenders.
In an ambitious plan to secure the company’s future, Interserve and its advisers are examining the option of spinning off RMD Kwikform, one of its most profitable businesses, to the holders of hundreds of millions of pounds of its debt, Sky News reported.
This would leave the remainder of Interserve as a more focused support services business.
According to Sky News, the plan is at an early stage and may not get formal approval from Interserve’s board, although it is said to have indicative support from some of the company’s lenders.
“It would make the rest of the company - if it stayed listed - a much cleaner story for stock market investors,” one source told Sky News this weekend.
Interserve looked at selling the division two years ago but decided to retain ownership of it after an eight month strategic review, arguing that “the structural drivers for global infrastructure remain strong”.
The precise value of RMD Kwikform in any spin-off to the company’s lenders is unclear, although analysts have valued it at between £250M and £300M. Interserve has about £600M of debt.
In October, RMD Kwikform announced that it had launched a new ground shoring division in Hong Kong in a bid to offer the market a “top to bottom” solution to complement its existing above ground solutions.