New York hedge fund Coltrane Asset Management, Interserve’s biggest shareholder, has tabled an alternative proposal that would leave shareholders with 37.5% of the business.

Interserve’s Board had dismissed Coltrane’s earlier proposals as undeveloped and recommended shareholders accept a revised plan.

A spokesperson for Coltrane said: “Given that a better proposal for a greater number of stakeholders is now on the table the directors, in their capacity as fiduciaries to the company, should halt cooperation with lenders on implementation of their plan.

“If the company is not able to make such a decision then this raises serious questions about the board’s decisions leading to this point, and about the position of the lenders, including major UK banks.”

In response, the Board said the Coltrane proposal requires the consent of the lenders, bonding providers and Pension Trustee to be capable of implementation, but Coltrane has refused a request to share the proposal with these parties and their advisors.

Interserve said: “In light of the company’s short-term liquidity requirements and given that Interserve’s Deleveraging Plan is currently the only fully funded proposal which has the agreement of lenders, bonding providers and Pension Trustee, the Board is unable to consent to this request without risking the future of Interserve together with its employees, pensioners, customers and suppliers.

“The Board also notes that the Coltrane proposal is non-binding and unfunded and remains subject to due diligence. There is therefore no certainty that Coltrane’s proposal could be successfully implemented.”

Interserve added that its Board will be providing more detailed feedback to Coltrane on its proposal today and confirmed that the Board remains open to considering any proposal which provides liquidity and a deleveraging solution that is capable of implementation in the time frame available.

However, it said that the Board continues to recommend that shareholders vote in favour of the Deleveraging Plan, which is currently the only plan that is capable of implementation in order to provide sufficient liquidity, cash and bonding facilities to allow the Group to service short term obligations and secure a stable platform for the business.

Glyn Barker, chairman of Interserve, said: “This is a critical time for Interserve. The proposed Deleveraging Plan, recommended by the Board, is the result of a long period of intensive negotiation to align stakeholders behind a plan to strengthen the balance sheet and secure a strong future for the business. It is the only plan today that provides a certain future for Interserve, preserving some value for shareholders while securing jobs, pensions, and continuity of services.

“In the absence of any other plan that is capable of implementation, further uncertainty continues to risk an outcome in which there is no return to shareholders, including Coltrane, and considerable disruption to the business.

“The Board considers the Deleveraging Plan to be in the best interests of Interserve and all its stakeholders, including shareholders, as a whole. Accordingly, the Board continues to unanimously recommend that shareholders support the Deleveraging Plan and vote in favour on 15 March.”

Shareholders are due to vote on the Board’s restructuring plan at a meeting on March 15.

Lenders are reported to have lined up Ernst & Young to handle the administration of Interserve in the event of a failed agreement.