Jarvis may have to borrow £20m to survive

Jarvis has warned its creditors that it may need to borrow £20m to last it until August, a source close to the banks has warned today (Friday).

According to Reuters, the company, once Britain’s biggest provider of public transport maintenance and construction services, is expected to ask its banks this summer to exchange some of its £280m of debt for shares in the company to reduce its interest charges.

But Jarvis is struggling to last until then. It announced on 29 March it had borrowed an additional £17m to cover unexpected working capital costs, and it privately told its banks on 22 April that it might still need extra money, sources familiar with the situation said on Friday.

"They came up with surprise one-off costs," said one source, adding that the company had said the costs might still be avoided. "(It was) £20m costs...connected to previous asset sales."

A second added: "The company had a meeting with bankers outlining the whole funding requirement in addition to the £17m needed by the business to July, August," a second source added.

Jarvis declined to comment.