Costain is raising £100m from the capital markets in a share issue underwritten by Liberum Capital, Investec and HSBC.
Dubai-based ASGC has entered into a binding commitment to purchase 41,666,666 new ordinary shares at the £25m offer price, which will give it 15.2% of Costain’s enlarged share capital. ASGC is one of 26 companies within the Al Shafer Group.
When Costain first announced the rights issue in March, it said that it needed the £100m injection because of the impact of project bank accounts and the Prompt Payment Code meant that it no longer had enough cash liquidity.
Today Costain said it intends to use the net proceeds from the capital raising for general corporate purposes, allowing it “to demonstrate its increased financial capacity to clients, providing a competitive advantage in a sector where clients and suppliers are increasingly scrutinising their partners' balance sheets”.
It would also “provide the financial capacity to support the requirements of clients and partners for joint operation delivery structures and project bank accounts where appropriate”.
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