Costain鈥檚 share price drops as it reveals contract problems on 拢120m Belvedere waste-to-energy project

The main contractor on Costain鈥檚 拢120m Belvedere energy-to-waste project has become insolvent owing it 拢22m in revenue it has already booked.

In a contract update to the City, Costain said that the Austrian parent company of Belvedere鈥檚 main contractor AE&E Inova, called AE&E Group, has filed for 鈥渋nsolvency proceedings under external administration鈥�. AE&E Inova itself continues to trade.

So far there are no overdue payments and Costain said it expects its next stage payment of 拢2.6m on 10 December to be made.

However, Costain鈥檚 work in progress and milestone payments have not been certified and are worth 拢22m more than the cash it has received.

It said: 鈥淐ostain has sought assurances from AE&E Inova that they will make all future payments due under the contract. However, Costain considers that there can be no certainty that such assurances can be obtained.鈥�

Costain said it is in engaged in active discussions with AE&E Inova and Cory Environmental regarding the financing and completion of the project.

Costain鈥檚 share price dropped 4.76% this morning to 200p, and analyst Kevin Cammack of Cenkos, predicted it would fall at least 10% during the day.

 

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