Costain confirms £100m Dubai investment
Costain has successfully raised £100m from investors, after announcing plans to strengthen its balance sheet.
Earlier this month, the contractor announced that Dubai-based contractor ASGC was buying a 15% stake in the business as well as investing £25m in the £100m rights issue.
Costain originally announced the rights issue in March after
it revealed a £6.6m pre-tax loss in 2019.
It blamed the loss on contract delays, a contract cancellation and a costly arbitration outcome on a major road scheme in Wales – the A465 Heads of the Valleys project – among other issues.
Covid-19 has also disrupted the business, with Costain warning that in a worst-case scenario it will see six months of disruption to its activities, which could result in a 56% reduction in profit from complex delivery works, a 10% reduction in profit from its high-margin services, and a 43% reduction in new work.
Costain chief executive Alex Vaughan said: “We are pleased to have completed our £100m equity raise providing us with a stronger balance sheet to take advantage of opportunities in our target markets. Costain has significant potential to capitalise on the UK’s many infrastructure investment programmes aimed at safeguarding our society, unlocking economic growth and decarbonising our environment. The recent contract wins across our core sectors demonstrate the value our clients recognise we bring to meet their changing needs.
“We are back on site across the business with strict and effective safety procedures in place. I am proud of how our colleagues have responded to the challenges created by covid-19 and I’m confident about the positive outlook for our business.”