We use functional cookies for a number of reasons, such as keeping the Costain website reliable and secure and to analyse how our site is being used.
Will you accept our use of non-essential cookies?

Yes No Privacy Notice

Changes To Joint Venture In Spain

Team Seeks Low-Carbon Supply Chain

1 July 2015

Costain, the engineering solutions provider, announces today that, by mutual agreement with its joint venture partner, Santander, the net assets held by the non-core Costain-Santander joint venture in Spain are, subject to the fulfilment of certain conditions, to be reorganised and split equally between the parties (the “Reorganisation”).

Upon completion of the Reorganisation, Santander will own the two largest pieces of development land currently held by the joint venture and will assume a portion of the outstanding debt of the joint venture. Costain will own the operating assets of the golf courses and the marina concession, and the associated smaller parcels of land and will retain the balance of the outstanding debt.

The Reorganisation includes set-off provisions such that the net consideration payable by each of Costain and Santander will be zero and upon completion each of Costain and Santander will hold net assets representing 50% of the value of the joint venture. Costain will own 100% of its share of the assets.

Following the completion of the Reorganisation, the Group’s non-core activities in Spain will comprise the operation of leisure-based assets with a reduced exposure to land development. The Reorganisation is not expected to have any significant impact on the net assets or the reported earnings of the Group.

Completion of the Reorganisation is expected to take place by the end of September and is conditional upon: (i) certain necessary tax clearances in Spain; (ii) the registration of a complementary public deed confirming the joint venture’s ownership of certain plots of real estate to be transferred to Santander; and (iii) there being no material adverse change in the joint venture prior to completion.


Costain                                         Tel: 01628 842 444
Andrew Wyllie CBE, Chief Executive
Tony Bickerstaff, Finance Director
Catherine Warbrick, Investor Relations Director
Graham Read, Communications Director

Instinctif Partners                          Tel: 020 7457 2020
Mark Garraway
Helen Tarbet
James Gray

1. Costain currently equity accounts its investment in the joint venture, recording one line in the income statement for its share of the results of the joint venture and one line in the balance sheet for the investment. Following completion of the Reorganisation, Costain will record the individual income and expenses and assets and liabilities of the restructured entity including its share of the outstanding debt as detailed below.

2. At 31 December 2014 Costain held an investment in the joint venture with a carrying value of £25.2 million.

3. Costain recorded a loss of £1.3 million on its investment in the joint venture in the year ended 31 December 2014.

4. The full details of the Reorganisation are set out below.

Costain Alcaidesa Limited (a wholly owned subsidiary of Costain) (“Costain Alcaidesa”) has entered into an agreement (the “Agreement”) to terminate its Spanish real estate joint venture with Altamira Santander Real Estate, S.A. (“Altamira”) which is governed by a joint venture agreement between Costain Alcaidesa and Altamira (the “JV Agreement”).

The joint venture, operated through Alcaidesa Holding, S.A. (“Alcaidesa Holding”) and its subsidiaries (the “JV”), is currently owned 50% by Costain Alcaidesa and 50% by Altamira.

The Agreement provides for:

a. the termination of the JV Agreement;

b. Costain Alcaidesa to acquire Altamira’s 50% stake in Alcaidesa Holding for €37,333,196.61;

c. certain real estate assets owned by the JV to be transferred to Altamira for €45,833,196.61; net of Altamira assuming €8,500,000 of the debt which is currently owed by the JV to Banco Santander. S.A.

d. the repayment by Costain Alcaidesa to Banco Santander S.A. of the remaining debt of the JV amounting to €11,500,000 (such repayment to be made from existing Group facilities.); and

e. a distribution of reserves by Alcaidesa Holding to Costain Alcaidesa