Costain will not benefit financially from the deal. Credit: Zhu Hongzhi via Unsplash.

United Arab Emirates (UAE)-based construction group Al Shafar General Contracting Company (ASGC) has divested its entire 14.97% holding in UK infrastructure solutions provider Costain Group, selling 41.66 million shares at 91p ($1.18) each to institutional buyers.

Yesterday (10 September), ASGC revealed plans to sell approximately 30 million ordinary shares of 1p each in the capital of Costain. These shares made up about 10.8% of Costain’s total issued ordinary share capital.

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A Costain spokesperson was quoted as saying: “We note that the sale by ASGC was increased from their original proposal, reflecting strong demand from other institutions for our shares including existing holders increasing their positions. This recognises the continued strong performance of the business, high volume of forward work and on-target margin growth.”

The transaction expanded by nearly 39% due to robust demand, culminating in gross proceeds of approximately £37.9m.

The sold shares correspond to ASGC’s total investment in the UK-based infrastructure solutions provider. Costain, not involved in the sale, will not benefit financially from this transaction.

Settlement for the sale is anticipated on Friday (13 September), contingent on standard conditions being met or waived.

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ASGC, which became Costain’s principal investor following a £25m investment in May 2020 during a £100m capital raise, has now fully exited its position.

Redburn (Europe) is managing the share placement process as the exclusive bookrunner.

Last month, Costain’s reported operating profit increased to £13.9m for the first half of 2024.