Suspension of trading on AIM

RNS Number : 4203V

TEG Group (The) PLC

28 October 2014

 

 

28 October 2014

The TEG GROUP PLC

("TEG" or the "Group")

Suspension to trading on AIM

The Group has requested the suspension of trading of its shares on AIM pending clarity on its financial position.

Update on the Greater Manchester Waste Contract

TEG has remained in detailed discussions with Costain in respect to the £2.8m of retentions held under the Greater Manchester Waste Contract (the "Contract"). The Group has been working with Costain to release these retentions held under the Contract for over two years.

TEG has been undertaking remedial works for Costain as part of a programme of works to manage the conclusion of the Contract.  As previously announced, whilst PI insurers have responded in relation to certain remediation costs, the Company continues to bear the cost of its own EPC Division required to manage the conclusion of the Contract.

TEG has engaged recently in discussions with Costain in relation to the Group's overall financial position, the release of the retentions monies owed and TEG's ability to continue to provide the requested remedial work under the Contract.  TEG had proposed options to exit the Contract but unfortunately TEG was informed on 27 October 2014 that it will be unable to negotiate such an exit, though the parties will remain in dialogue over the execution of the Contract. 

Furthermore, the 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, as highlighted with the interim results on 30 September 2014.

EPC Division

As announced on 30^th September 2014, the Group was unable to reach financial close on its proposed project for Gaydon.  Certain other projects have been delayed into 2015 and therefore the Group has no prospect of securing the revenues required to sustain the EPC Division in the short to medium term.

Operations Division

The Group's Operations Division continues to perform satisfactorily and to trade profitably. The Board remains confident it will be able to continue the normal course of affairs in relation to the Operations Division.

Financing arrangements and suspension

Whilst the Group is continuing to explore funding options, until some form of resolution can ultimately be reached which would allow further funding to be secured for the current and future working capital needs of the Group, the Board has requested that trading in the shares of the Group are suspended until such time as this uncertainty can be removed.  The 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.

Further announcements will be made in due course. 

 - ENDS -

Contact:
The TEG Group Plc	Tel: [phone]
Michael Fishwick, Chief Executive	www.theteggroup.plc.uk
Peckwater PR	Tel: [phone]
Tarquin Edwards	[e-mail]
N+1 Singer Advisory LLP (Nomad & Broker)	Tel: [phone]
Andrew Craig/Ben Wright

 

END

 

 

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