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M&G backing boosts Costain rescue hopes

Patrick Tooher
Monday 15 July 1996 18:02 EDT
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Costain's hopes of securing approval for a controversial refinancing package received a boost yesterday when one of the biggest shareholders in the troubled construction group came out in support of the deal, writes Patrick Tooher.

M&G, which speaks for 7.36 per cent of the company, said it would vote in favour of the package at next Monday's egm.

Alan Lovell, Costain's chief executive, said he would be meeting other institutional shareholders this week in a bid to "drum up" support. But Costain has no plans to meet its two biggest investors - Kuwaiti construction firm Kharafi and Saudi-based Raymond International - which between them hold 38 per cent of the company. The Middle East investors have so far made no comment about their intentions.

The rescue deal involves a pounds 73.6m share issue that would give up to 40 per cent of the enlarged share capital to a Malaysian construction group, Intria Berhad.

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