Interserve’s share price tanks on back of Derby waste woe
November 14, 2018 – Share price shredded in Monday and Tuesday trading
Worries that Interserve could be facing more losses on another botched energy-from-waste scheme have sent its stock plummeting 30% since Friday.
The slide pushed Interserve’s share price to a 34-year low and has been sparked by waste-management firm Renewi, which is in a 50:50 JV with the embattled contractor to deliver an energy from waste firm in Derby.
Last week Building revealed the Derby incinerator has yet to be handed over to clients, Derby city council and Derbyshire county council, despite Interserve promising to have done so by the end of September.
In a half year report, Renewi said Interserve may lose so much money on delays to completion of the plant, originally due to be delivered in spring 2017, that, as its JV partner, it would be forced to cover additional costs.
It added: “While principal responsibility for the commissioning of the Derby facility rests with Interserve, a failure to bring it into full service could result in Interserve meeting the ceiling of its liquidated damages obligations to Renewi, exposing the group [Renewi] to certain future operating costs.”
In March, Interserve completed an almost £300m refinancing but investors are increasingly sizing up the possibility of the contractor being forced to go back to banks for another bailout.
As of 2pm, Interserve’s share price was 31.5p – down from Friday’s close of 44.5p.