Deloitte backs Jarvis plan

Jarvis, the troubled PFI contractor, is thought to have received the endorsement of Deloitte for its financial restructuring plan.

Jarvis, the troubled PFI contractor, is thought to have received the endorsement of Deloitte for its financial restructuring plan.

The accountancy firm was appointed last month by Jarvis's bankers, Barclays and Royal Bank of Scotland, to advise them on whether they should continue to support the company, which is now in breach of its loan covenants and has debts of £230m. Deloittes gave a four-hour presentation of its findings to the two banks yesterday and these are thought broadly to back the Jarvis management and advocate a continuation of the waiver of its banking covenants.

Barclays and RBS agreed to the waiver until the end of this month to give Jarvis time to work on its restructuring, which may involve asset sales and possibly a debt-for-equity swap.

Sources close to the negotiations say that Jarvis is hopeful that, on the basis of the Deloitte report, it will have bought itself more time. "There is a feeling generally that everyone's interests would be better served by allowing the company to trade its way out of trouble rather than putting it into receivership," one source said.

Jarvis shocked the markets 12 days ago by disclosing that its debts had doubled while it also faced write-offs of £156m.