黑洞社区

Waste specialist TEG has suspended trading in its shares in part because Costain is withholding 拢2.8m of retentions payments from the firm.

TEG was working for Costain on its 拢397m contract to build 46 different waste processing facilities across the Greater Manchester Area.

But in an announcement to the City on Tuesday, TEG said it had suspended trading in its shares on the AIM market, due to concerns over its funding arrangements, amid a dispute with Costain over retentions payments.

TEG said it had been 鈥渨orking with Costain鈥� to get 拢2.8m of retentions released for 鈥渙ver two years鈥�.

TEG said it had been 鈥渦ndertaking remedial works for Costain as part of a programme of works to manage the conclusion of the contract鈥�, but while some of its costs had been covered by insurers it had had to bear some of its own costs as well.

It said it had 鈥減roposed options鈥� for it to exit the contract but was informed on 27 October 2014 that it 鈥渨ill be unable to negotiate such an exit鈥�.

It added: 鈥淭he board believe that there is no prospect of the release of any of the retentions owed to TEG in the near future which will impact significantly on working capital requirements.鈥�

The firm said the board had requested that trading in its shares be stopped until it had certainty over its funding arrangements.

It added: 鈥淭he group remains in discussions with its existing providers of finance regarding the on-going provision of facilities, will maintain a dialogue with Costain and will separately continue to explore all financing and strategic options open to it, including the potential sale of certain parts of the business.鈥�

In August Costain said it had withdrawn from the waste market after problems in Manchester led its natural resources division to report a 拢2.6m loss in the first half of 2014.

The firm said there had been 鈥渄esign faults鈥� at four of the sites.