Fletcher Building shares fall after divesting half of Fiji business
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More news: Shares in Fletcher Building lowered on the ASX, after the building supplies company agreed to divest half of its Fiji construction business to two local partners.
Shares were down 1.5% to $2.67 by 2:55pm AEST.
Embattled Fletcher Building to divest half of Fiji business
The news: Fletcher Building has agreed to divest half of its Fiji construction business to two local partners — Fiji National Provident Fund and Fijian Holdings Limited.
The numbers: The troubled build products supplier will receive NZD20 million ($18.5 million) for the Fiji business, which comprises Fletcher Construction and Higgins branded operations.
It expects to record a non-cash impairment of approximately NZD15 million on the business, with the deal set to be completed in late June or early July after it gets Fijian regulatory approvals.
The context: The divestment comes just weeks after Fletcher cut its full-year earnings guidance in a slowing market, prompting a downgrade of its credit rating by Moody’s as well earnings downgrades by a number of analysts.
The NZX and ASX-listed company has seen several top management departures in recent months, as it faces shareholder discontent over weak share price performance and a half-year loss.
Fletcher has racked up further provisions against troubled construction projects for SkyCity in Auckland and at Wellington Airport.
The source: ASX announcement
