John Armitt, Costain's chief executive, said that "there is a clearly a possibility" that Skanska may take a controlling stake in Costain. He added that the appointment of Anders C Karlsson, the president of Skanska Europe, as a non-executive director was " a good thing for the company" and helped to strengthen the relationship between the two groups.
Skanska, one of Sweden's largest construction companies, bought a 7.6 per cent stake in Costain last October, with an option to increase it to 40 per cent over the next two years. Skanska's moves depend on the fate of the 37.5 per cent Costain stake held by Malaysian contractor Intria, whose majority shareholder, Mekar Idaman, is in receivership.
The appointment came as Costain reported a sharp fall in its interim pretax losses to pounds 1m from pounds 5.4m a year ago. However, turnover was down 37 per cent to pounds 200.8m.
The contractor said that it was fighting hard to regain the credibility lost when its shares were suspended for a year in November 1996 amid a flurry of financial problems. Mr Armitt said: "There is much to do before Costain can claim a major turnaround but we are now moving in the right direction".
Since being readmitted to the list in November 1997, the shares had a poor run, falling from 46p to yesterday's close of 21.5p
Costain hit the news a few years ago as it fought a bitter battle against environmentalists led by Swampy over the construction of the Newbury bypass.Reuse content