TEG has been embroiled in discussions with Costain for two years over 拢2.8m of retentions held under a waste contract in Greater Manchester.
As we reported last month, TEG has been unable to negotiate an exit the contract and has been unable to secure the release of any retentions owed to it. ()
In a statement yesterday, the TEG board said that given the ongoing costs associated with managing the conclusion of the contract and the associated remediation costs, it was unlikely to get any equity financing. TEG continues to trade 鈥� it has recently secured a three-year local authority waste recycling contract worth between 拢1.5m and 拢2m 鈥� but has tun out of working capital.
While the directors continue to explore options, they believe that 鈥渢here may be little or no value remaining in the equity of the group鈥�.
The board said that it was now looking to sell its entire operating division as a going concern.聽
TEG was awarded a contract by Costain in 2009 to provide four silo cage in-vessel composting facilities by 2011. Costain was the main contractor for the Viridor Laing consortium, which has a 拢3.8bn waste management PFI contract for Greater Manchester Waste Disposal Authority.
In April 2009 TEG鈥檚 news announcement put the value of its contract at 拢38m. By July 2009, in a briefing to financial analysts, Costain described it as a 拢52m contract.
A Costain spokesperson said: "Costain declines to comment."
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