TEG announces fundraising proposals

The Chorley-based recycling firm has announced plans to raise up to approximately £3.8m through share placing.

In an announcement on the London Stock Exchange, the TEG Group said it has placed 30,766,850 new shares at a price of 10p/share to raise proceeds of approximately £3m, which was arranged by finance firm Ambrian Partners with institutional investors.

In addition, the company has also announced an open offer of new shares to its shareholders on the basis of one new share for every 10 existing shares held at a price of 10p.

TEG said the open offer will generate gross proceeds of approximately £800,000 to the company, should it be fully subscribed.

TEG said in a statement: "The placing and the open offer are conditional upon, amongst other things, the passing of resolutions by the members of the company at a general meeting.

"In order to implement the placing and the open offer, the directors will need authority from the shareholders to allot the new ordinary shares and to dis-apply statutory pre-emption rights in respect of the placing shares. A circular setting out details of the placing and the open offer and containing the notice of general meeting will be sent to shareholders later today."

The TEG Group, which operates and develops biogas plants for producing compost, said there are a number of payments and retentions relating to the three Greater Manchester plants in Bredbury, Trafford Park, and Rochdale that are now significantly overdue.

TEG added that the payments and retentions relate to various items including acceptance retentions, the return of liquidated damages relating to take over and disputes over payments for variations to initial scope of works. At present, TEG said these payments amount to approximately £900,000.

The construction of a fourth facility in Bolton has also hit delays, partly due to the severe weather in the latter part of 2010.

TEG said the delay in receiving the Instruction To Proceed on the fourth plant has "had a significant impact on cashflow as TEG has carried a significant project and overhead costs in anticipation of the Instruction To Proceed since the second quarter of 2010".

TEG's statement added: "In addition to the delay, significant sums of monies owed to the company have been withheld, as described above, and this has further compounded the company's cashflow problems. As such, and with continuing uncertainty around the timing at which the monies subject to retention will be released, and at which time the Instruction To Proceed may be awarded, the directors believe that it is prudent, and in the best interests of its shareholders to proceed with the placing and the open offer at this time.

"When the retentions are released to the company, and the Instruction To Proceed award and payment made, these sums will be used 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, as part of the Greater Manchester Waste Disposal PFI contracts.

Your Comments

Read our comments policy

Related Articles

Sign up to receive the Place Daily Briefing

Join more than 13,000 property professionals and receive your free daily round-up of built environment news direct to your inbox


Join more than 13,000 property professionals and sign up to receive your free daily round-up of built environment news direct to your inbox.

By subscribing, you are agreeing to our Terms & Conditions and Privacy Policy.

"*" indicates required fields

Your Job Field*
Other regional Publications - select below