Fletcher Building Limited (ASX: FBU) resumed trade today following last Thursday's trading halt, dropping 12% this morning on the ASX.
The New Zealand construction giant completed the review of 16 projects in its Building + Interiors (B+I) business, reporting NZ$486 million in losses beyond those already flagged in October 2017. Projected EBIT loss for the B+I division now amounts to NZ$660 million (about AU$610 million), nearly offsetting the NZ$680 million to NZ$720 million earnings guidance for the Fletcher Building Group excluding B+I.
Fletcher Building chairman and former Commonwealth Bank of Australia (ASX: CBA) CEO Sir Ralph Norris announced he will step down no later than the next AGM.
The expected loss on B+I provoked a breach of Fletcher Building's financial covenants on its two main debt structures – a commercial banking syndicate and US private placement – accounting for NZ$2.4 billion of funding. The company received a waiver from banks and is negotiating a similar exemption with noteholders. Failure to agree to new terms with lenders would result in a default, but Fletcher Building reaffirmed its solvency.
In line with the company's dividend policy, shareholders won't receive a interim dividend for the current half year.
