Interserve faces regulatory probe into energy from waste exit

Shares crashed by a third on the news of higher costs to exit energy from waste

More bad news for the contractor

Troubled contractor and outsource group Interserve PLC (LON:IRV) is facing a regulatory probe into how information on its exit from its energy-from-waste business was released.

Interserve has received a formal notice of referral to the Financial Conduct Authority’s enforcement division for its actions during the period 15 July 2016 to 20 February 2017.

READ: Liberum downgrades Interserve as risks start to outweigh rewards

Interserve announced the closure of its energy from waste business in August 2016 following a £70mln cost provision for a contract in Glasgow that had been flagged three months earlier.

Between July 2016 and February 2017 Interserve shares rose to 335p from 277p before crashing to 227p on the news the provision was being raised to £160mln.

Concerns that Interserve might follow fellow contractor Carillion into administration eased recently when it signed off on a £834mln refinancing package.

The contractor said it was co-operating fully with the FCA investigation.

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