Yahoo Finance Interserve lines up closure of power division
Interserve is to close its power business as part of the restructuring of its industrial division as it battles to reduce costs.
The division specialises in maintaining power lines and poles and has worked for most network operators across the UK, including Northern Powergrid, Scottish Power Energy Networks, Siemens and National Grid.
The planned sale of the division is understood to affect around 70 staff, who were told yesterday of the start of the redundancy consultation process. A number are expected to be employed elsewhere in the company.
The power division, which has been operating for around 90 years, accounts for £15m of Interserve’s annual revenue.
An Interserve spokesman said: “After careful consideration we have decided to close down our power business, as we look to consolidate and centralise our industrial portfolio.”
He said the company was “committed to completing all contracted works” and expected the majority of projects will be complete by the end of June this year.
Interserve was hit last year when it had to make a £195m provision for an energy-from-waste contract where costs had spiralled, leaving it in danger of breaching its financial covenants.
It managed to secure £180m of short-term funding from its lenders in December, but those facilities expire on March 30, leaving it searching for longer term financial security.
Chief executive Debbie White announced at the end of last year that she would be seeking to save between £40m and £50m by 2020 by consolidating parts of the business.
Reports emerged last month that the company was being monitored by the Cabinet Office amid fears that it could run out of cash like fellow outsourcer Carillion.
