Green technology firm Teg Group yesterday requested suspension of its shares from trading on Aim as the company sought to clarify its financial position.
The group made the decision to halt trading after failing to reach an agreement with engineering group Costain over the release of £2.8m owed in respect of its Greater Manchester Waste Contract. Teg stated that it had been working with Costain to release £2.8m in retentions held under the contract for more than two years.
Teg has been undertaking remedial works for Costain to help manage the conclusion of the contract.
The company’s board said it believed that there was “no prospect of the release of any of the retentions owed to Teg in the near future”. This in turn is expected to impact significantly on working capital requirements.
In its interim statement published in September, Teg’s board stated that “to secure the future of the group it is necessary to secure further funding, both for projects and working capital”.
Teg also recently announced that its engineering, procurement and construction (EPC) division had been unable to reach financial close on its proposed anaerobic digestion project in Gaydon, Warwickshire.
Therefore, it said, it had no prospect of securing the revenues required to sustain the EPC division in the short to medium term.
The company said yesterday that its operations division continued to perform satisfactorily.
Shares in Teg had fallen by 4.7 per cent before trading was suspended.