Troubled contractor and construction company Interserve has had a rescue package rejected by shareholders in a critical vote.

The result of the vote has triggered a “pre-pack” administration of the company overseen by accountancy firm EY, expected to be initiated by the end of the day, according to reports.

A ‘pre-pack’ administration will see Interserve’s lenders take 100% ownership of the company and is intended to avoid its total collapse, preserving ongoing contracts and avoiding the major disruption as caused by the failure of Carillion in January 2018.

Opposition to the deal was led by American investment firms Coltrane and Farringdon, who collectively owned 35% of shares in the company. According to BBC business editor Simon Jack, 95% of all others who voted were in favour of the rescue deal, of which over 16,000 small shareholders were “totally wiped out.”

After dismissing the deal as ‘terrible’ in February,  Coltrane offered an alternative rescue plan, which would have given shareholders a 10% stake. The company also expressed dismay at the £76m spent by Interserve on financial restructuring advice and that the company directors supposedly declared they would not invest any of their own money buying new shares.

Shareholders voted 59.38% against the rescue plan, which would have seen their stake reduced to just 5%, with lenders being handed the large majority of the business. As part of the failed deal, banks and hedge funds that held Interserve’s £631m debt would have cancelled £485m of it, in return for ownership of the company’s stock. Following the failure of the deal, Interserve’s lenders are expected to take ownership of the business.

In an interview with The Telegraph over the weekend, chairman Glyn Barker said of the rescue vote: “I am very worried. [if the vote fails] We’ve got nowhere to go, as we’ll run out of money and the banks will exercise their security.”

Of the deal proposed by Coltrane, Barker said: “It doesn’t work. My biggest wish is that Coltrane and our lenders agree a consensual deal. That would be better for everyone because it takes away all the uncertainty and we can all get on with life.”