INFRASTRUCTURE firm Mouchel is to be seized by its lenders in a pre-pack administration after shareholders failed to back a last-ditch restructuring.
Mouchel, which provides consulting and business services on road building and other public sector projects, had warned it would collapse unless investors agreed to give banks shares in return for wiping out a large chunk of its £140m debt mountain.
But the proposals failed to garner the required 75% support of shareholders, triggering alternative plans for administrators to sell its assets to lenders RBS, Lloyds Banking Group and Barclays.
Although shareholders will now be wiped out, the deal will preserve the company’s 8,000 jobs and allow it to honour its contracts.
The group, which has been hit by Government spending cuts, was behind major building projects for more than a century after Frenchman Louis Gustave Mouchel brought the patent for reinforced concrete to the UK in 1897. Administrators are now set to be appointed after a hearing in the High Court.
The lack of support from shareholders is a surprise because the deal would have paid them a special dividend of 1p a share. The announcement marks the final chapter in a huge decline in value for the group, which last year turned down takeover offers from rivals Costain and Interserve for more than £150m, saying they significantly undervalued the company. But since then its fortunes have dramatically declined.
Before shares were suspended yesterday they were trading at less than 1p, compared with two years ago when they were worth 120p.
Mouchel’s woes were compounded last year when Richard Cuthbert resigned as chief executive after the company revealed a £4.3m accounting error.
The company slumped to an £11.6m loss in the six months to the end of January.