Main contractor AE&E Inova’s Austrian parent company, AE&E Group, went into administration on 20 October because of failure over bond refinancing. It is continuing to trade and trying to renegotiate with its banks.
Costain has been paid all money owed to date and the next stage payment, for £2.6m, is due by 10 December 2010. Costain says that AE&E Inova has confirmed that it intends to make the payment.
In a statement to shareholders this morning, Costain said: “As a result of work in progress and milestone payments not yet certified or due, the value booked for work carried out to date is greater than cash received by £22m. Costain has sought assurances from AE&E Inova that they will make all future payments due under the contract. However, Costain considers that there can be no certainty that such assurances can be obtained.”
Ultimate client for the Belvedere facility is Riverside Resource Recovery Ltd (RRRL), a subsidiary of Cory Environmental. RRRL awarded the main construction contract to AE&E Inova, who in turn placed a £120m subcontract with Costain for a major part of the works.