FM and construction firm Interserve says the cost of exiting its energy from waste business is likely to increase to £160m. Last year, the firm said it had set aside £70m to cover incurred and anticipated losses.
In a stock exchange update, Interserve said the “Board has concluded that the exceptional provision of £70m announced in May 2016 is no longer adequate to reflect the incurred and anticipated losses associated with this business”.
In the update, Interserve pointed to the unexpected termination of its contract with Viridor last November as a contributory factor. Viridor served a termination notice after ongoing delays with the Glasgow Recycling & Renewable Energy project.
The company said it had secured new banking facilities and extended existing facilities, with net debt expected to rise to £450m in 2017 from £390 in 2016.
Interserve shares dropped by 29% on the announcement.