TEG to proceed with Bolton facility

The Chorley-based recycling firm has received the Instruction to Proceed for the construction of a fourth Greater Manchester composting facility.

The facility, which will be based in Bolton, has been delayed partly due to the severe weather in the latter part of 2010.

In an announcement on the London Stock Exchange on Thursday, TEG said in a statement: "The detailed construction programme is still to be agreed but TEG will secure prices by placing orders with its sub-contractors by early July 2011 and it is anticipated that the project will move into construction in the second half of 2011. The value to TEG of this project is approximately £13m. Planning permission and the environmental permit are in place for the construction and operation of this facility."

TEG Group, which operates and develops biogas plants for producing compost, is providing waste recycling facilities under the Greater Manchester Waste Disposal Authority's PFI contract.

TEG said there are a number of payments and retentions relating to the other three Greater Manchester plants in Bredbury, Trafford Park, and Rochdale that are now significantly overdue.

The recycling firm announced plans in June to raise up to approximately £3.8m through share placing.

The delay in receiving the Instruction To Proceed on the fourth plant has had an impact on cashflow at the company and TEG said it would use the money to fund the plant roll-out programme of the company, accretive acquisitions and for general working capital purposes.

Construction firm Costain agreed a £38m deal with TEG to build the four facilities.

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