Interserve goes into administration after rescue deal rejected

Ownership falls to lenders but company will continue trading and operating public services

The government contractor Interserve has gone into administration after its largest shareholder, the US hedge fund Coltrane, led a rebellion against financial rescue plans drawn up by the company's lenders.

About 16,000 small shareholders have lost their investment, with the business sold to hedge funds and banks via a "pre-pack" administration which means Interserve, which employs 45,000 people in the UK, can continue trading.

Related: Interserve: a calamity created in the boardroom | Nils Pratley

First Carillion and now Interserve. The gov't model of outsourcing services to cut costs has failed. It is time to bring these contracts back in-house. https://t.co/yjfvTqBmpo