COSTAIN group, the debt-laden construction giant, is likely to face a stormy shareholder meeting next week when it seeks approval for its controversial #73m rescue package.
Investors will be asked on Monday to back a refinancing plan that could hand effective control to a Malaysian company.
Last month the troubled group launched an open share offer to raise #73.6m, underwritten by Intria Berhad, a Malaysian company, and a consortium of Costain's bankers.
If shareholders do not take up the offer, Intria could be left with up to 40% of the company and the banks with 35%.
Trading in Costain's shares was suspended last month after their value halved to 39p in one day after it announced it would not be able to meet the deadline for the publication of its annual results.
It was not helped by adverse publicity after it won the contract for the controversial Newbury bypass.
The refinancing package ran into trouble earlier this week when Kharafi, a Kuwaiti building company with 19% of Costain's shares, hinted it would reject the deal and demand to be involved in drawing up an alternative package.
Raymond International, another Arab shareholder with 19% of the vote, is also tipped to vote down the deal, putting the result in doubt.
Yesterday Costain appealed to shareholders to back the refinancing package at next week's meeting.
``The proposals are presently the only available means of securing continued support from the banks, upon which the group is dependent for its ability to continue trading,'' it said.
The company's woes intensifed when an organisation calling itself Costain Independent Shareholders Association (CISA) said it was demanding the resignation of chief executive Alan Lovell.
CISA chairman Alisdair Stark said association members would attend the company's extraordinary meeting on Monday and would distribute an open letter to shareholders.
In the letter he claims that Lovell must be removed if Costain is to have a future. Costain desires better than a rescue by Intria, manufacturer of fatty acids and glycerine, he said.
It is known how many people support CISA as Mr Stark was later unavailable for comment, but Costain was understood to be treating CISA as a distraction.
``Our records show Mr Stark has one share and lives in Newbury,'' said a spokesman.
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