NZX-listed giant Fletcher Building is talking to its bankers and wants more time in a trading halt, indicating major losses on big New Zealand construction projects, possibly breaching its banking covenants.
A media briefing was scheduled to be held at its Penrose headquarters on Great South Rd at 10am today.
But Fletcher has just announced that has been "postponed" and issued further information.
"Fletcher Building has requested a further trading halt (suspension in the case of the ASX) of its shares and capital notes on the NZX and ASX exchanges," the company has just announced this morning.
"The request has been made because the review of the key projects in its Building and Interiors (B+I) business as part of the preparation of the group accounts for the six months ended 31 December 2017 is still ongoing and not yet complete.
"As announced on 8 February, the current expectation of the board is that there will be further material losses in the B+I business beyond what was provided for in October 2017 and that once those further losses are determined and provided for, this will result in a breach of one or more of the covenants in the group's financing arrangements.
"Since making the 8 February announcement, the company has commenced discussions with its lenders in relation to the expected covenant breaches," Fletcher said in a statement released at 8.40am today.
"The company expects the trading halt to continue until the commencement of trading on Wednesday 14 February prior to which it will provide to the market an update of its review and the status of its discussions with its lenders."
Fletcher's market capitalisation is $5.4 billion and its shares had been trading at $7.77, a big slide from the $11.10 they were at in September 2016.
The company, listed on the ASX and NZX, went into a trading halt on Thursday last week, saying it was is in the process of reviewing the key projects in its Building and Interiors business.
That is part of the preparation of the group accounts for the December 31 half-year results, due out next Wednesday, the company said.
"Although the project reviews are not yet complete, the current expectation of the board is that there will be further material losses in the B+I business beyond what was provided for in October 2017.
"Once the extent of those further losses is determined and provided for, it is expected that this would result in a breach of one or more of the covenants in the group's financing arrangements," Fletcher's announcement to the NZX last week said.
Last week, the Herald reported how Fletcher Building had debt of $2.17 billion as of June last year. Shareholders Association founder Bruce Sheppard said that if the trading halt remained in place until today, that signalled the situation would be "pretty ugly".
In October, chairman Ralph Norris apologised to shareholders for the company's mistakes as the company took a further $125 million provision against difficult construction contracts including the $700m New Zealand International Convention Centre in Auckland and the Justice Precinct in Christchurch and said its B&I unit would report a full-year loss of $160m.