Interserve PLC (LON:IRV) faces a crucial vote on Friday for a rescue package to prevent the struggling outsourcer from collapse.
The construction, cleaning and catering contractor has been trying to persuade shareholders to back a deal that would see lenders write off their debt in exchange for equity from retail investors.
The plan would hand about 95% of the business over to lenders.
READ: Interserve's largest shareholder reportedly floats prospect of takeover bid ahead of rescue deal vote
If shareholders reject the proposal, Interserve could apply for a pre-pack insolvency administration to avoid a collapse.
However, this would give lenders full control of the business.
Ahead of the vote, Interserve’s largest shareholder urged the company’s would-be administrators against a pre-pack insolvency deal.
US hedge fund Coltrane Asset Management, which holds a 27.7% stake in Interserve, demanded EY – which is lined up to become the administrators – conduct a comprehensive marketing process for the firm and its assets.
Coltrane also raised the prospect of a possible takeover bid for Interserve.
Interserve’s shares have plunged 88% over the past year.
The group's ill-fated move into creating energy from waste resulted in hefty losses and contributed to a massive net debt of £630mln.
Interserve is one of the government’s largest contractors and employs 45,000 people in the UK.
Its contracts with the government include cleaning and maintenance for schools, hospitals and railway stations, as well as work for the Ministry of Defence and the Armed Forces.