TEG Group shares suspended
SHARES in the Lancashire composting and green energy specialist TEG Group have been suspended “pending clarification of the company’s financial position”.
The Preston-based group is short of cash becuase it has £2.8m tied up in a contract it carried out for Costain as part of the Greater Manchester Waste Contract.
The money has been held back until remedial work is completed.
The business warned in its half-year figures last month that it was “significantly undercapitalised” and needed new funding to secure its future.
On the back of that announcement the shares halved in value to about 2p and have fallen further to 1.3p since today’s brief suspension notice. Five years ago shares were worth 54p but at today’s price the company has a market value of just £2.3m.
In a statement TEG said: “Whilst the group is continuing to explore funding options, until some form of resolution can ultimately be reached which would allow further funding to be secured for the current and future working capital needs of the group, the board has requested that trading in the shares of the Group are suspended until such time as this uncertainty can be removed.
“The group remains in discussions with its existing providers of finance regarding the on-going provision of facilities, will maintain a dialogue with Costain and will separately continue to explore all financing and strategic options open to it, including the potential sale of certain parts of the business.”
In the year to the end of June pre-tax losses nearly doubled to £1.5m on sales of £5.6m, down from £12.9m. The business had total liabilities of £12.1m, down from £15.5m. TEG has worked on a number of high profile schemes such as the first anaerobic digestion energy plant to be constructed in the central London and the Greater Manchester Waste PFI project.
