Leighton’s Dubai unit may need bail-out – SMH

Posted on April 18, 2011 by

0



Al Habtoor Leighton, an affiliate of Leighton Holdings, may need a cash injection from its parent firm if its ongoing legacy projects are not paid on time, its top executive says.

“We have reported to our three shareholders the sensitivities of cash and cash collection. (If) we don’t get paid or something gets delayed then we need standby facilities,” Al Habtoor chief executive said Laurie Voyer said.

“At the end of the day, the shareholders need to come to terms with how to take the business forward.”

Leighton, Australia’s biggest contractor, is a unit of Germany’s largest builder Hochtief, which is facing a takeover threat from Spain’s ACS.

Hochtief replaced chief executive Herbert Luetkestratkoetter last week after Leighton issued a third warning in five months and forced it to lower its full-year outlook.

Leighton warned it expects a big loss this year due to cost blowouts at its two largest projects and a writedown on its Middle East joint venture, and sought to raise $A757 million to shore up its balance sheet.

Mr Voyer said that most contractors in the region have an issue with their legacy projects, adding the company is working with clients to sort out pending issues.

“We have not taken direct action at the moment about recovery. We are working to sort out issues with our clients,” he said, refusing to divulge how much the company is owed in the region.

The company is working on projects in the range of 20 billion UAE dirhams, Mr Voyer said.

Leighton wrote down the book value of its stake in Al Habtoor Leighton by 11 per cent in February to $845 million.

German brokers said last week they expected ACS to use any profit warning to pick up more shares and try to lift its stake above 50 per cent.

Since late last year ACS has been building a stake in Hochtief, banking on its German rival to help it diversify away from Spain’s struggling building industry.

Leighton was seen as the main prize of an eventual takeover.

Link

Advertisements
Posted in: APAC, Middle East