Costain's battle for survival took a bizarre twist yesterday, just three days before a crucial extraordinary meeting on Monday to vote on a proposed rescue package for the troubled construction and engineering company.
In an apparent attempt to jeopardise the rescue, which would see a Malaysian construction company underwriting a pounds 73m three-for-one rights issue, newspapers were yesterday sent an open letter calling for the immediate resignation of Costain chief executive Alan Lovell and an internal memo on Costain- headed notepaper, which the company described as a "fake".
The letter purported to come from a Costain Independent Shareholders' Association headed by Alisdair Stark, the group's self-styled chairman. Costain said yesterday Mr Stark held one share in the company and his wife one further share. The mobile phone contact number on the letter was yesterday switched off.
The provenance of the supposed internal memo was unclear last night. Claiming to be from Peter Bloomfield, managing estimator for Costain's South-east Asian division, the memo appeared to suggest a clampdown on dealings with the media by Costain staff on "Malaysian issues". A Costain spokesman said the signature on the memo was not Mr Bloomfield's and he had not written the memo.
The two documents underlined the fraught atmosphere in which Costain is this weekend attempting to drum up support for the rescue package without which, the company claims, it will have no alternative but to call in administrative receivers.
The package, which could see Intria, the Malaysian group, taking a 40 per cent stake in Costain, and bankers a further 35 per cent, is opposed by the company's two largest shareholders, Kharafi, the Kuwaiti industrial conglomerate, and Raymond International, a Saudi construction group.
Both have said they intend to oppose the proposals with their combined 38 per cent stake. The deal must be approved by 50 per cent of the votes cast at Monday's extraordinary meeting.Reuse content