Embargo until 11.59 a.m. Monday 23rd December Friday December 20th 1996

Press Release

'Crisis at Costain' Christmas Appeal Launched


The Costain Independent Shareholders Association (CISA), a group representing small independent investors, is today launching its Christmas Appeal for the welfare of Costain's employees and its subcontractors. Carol singers will be singing outside one of Contain's construction compounds on the route of the Newbury Bypass while Father Christmas will be shaking a collecting tin. CISA's concern arises as Costain teeters on the edge of receivership.

For the second time this year Costain has had to voluntarily suspend share dealings while it seeks to address its financial crises. Contain's debts are now greater than its assets. It is technically bankrupt. City sources have said that unless Contain's complicated rescue package - the second this year - is successful then administration is certain. It is reported that an administrator we due to move in on December the 11th this year and has only been avoided by a planned assets sale[1].

Contain's Bankruptcy could result in loss of pension rights and wages for its thousands of employees. For sub-contractors, many of whom are small businesses, it could mean their closure. CISA is particularly concerned that Alan Lovell, Contain's Chief executive over the past years, is expected to receive a golden handshake reportedly in the region of £350,000 when he leaves Costain in January[2]. It's hoped Mr Lovell will make a donation to the Christmas Appeal.

Costain will be holding two Extraordinary General Meetings on December 27th and January 6th 1997 to seek approval for sale of its coal assets and the re-issue of shares. CISA representatives will be attending both meetings.

Mr Andrew Wood, Secretary of Costain Independent Shareholders Association said

"Costain is technically bankrupt. Our appeal is for Costain's unfortunate employees and subcontractors who stand to lose most when Costain goes into receivership" He continued "We decided to sing carols and collect on the site of the Newbury bypass since this seemed to be Costain's greatest liability" ENDS

Editors Notes

[1] Contract Journal December 12 December 1996 Lead article.

[2] CISA press release July 17th 1996 'Shareholders demand Alan Lovell's resignation'