mxg in talks with bankers: covenants breached. Multiplex in...

mxg in talks with bankers: covenants breached. Multiplex in Talks With Bankers After Breaching Loan Covenants
Feb. 23 (Bloomberg) -- Multiplex Group is in talks with its banks and insurers and may sell some assets after escalating losses at London's Wembley stadium caused the Australian contractor to breach lending covenants. The company's shares fell.

Multiplex slumped to a A$119.6 million ($88 million) net loss in the six months ended Dec. 31, from a A$11.9 million profit a year earlier, the Sydney-based company said today. Losses from Wembley, which Multiplex today said will be finished in May, four months behind schedule, blew out to A$251 million in the half.

The company's cash and available borrowings declined to A$484 million at the end of December from A$745 million in June. Chief Executive Andrew Roberts said initials talks with banks and insurers indicated they will support the company. Multiplex may sell some assets to boost cash reserves and provide working capital.

It's concerning that Multiplex is ``working with its financiers,'' Nick Vrondas, an analyst at Goldman Sachs JBWere, said in a note to clients.

Multiplex shares fell 7 cents to A$3.21 at 11:40 a.m. in Sydney, and earlier reached a two-month low A$3.05. The stock has slumped 42 percent in the past year, the second-biggest decline on the benchmark S&P/ASX 200 Index.

The English Football Association this week shifted the F.A. Cup Final, soccer's end-of-season showpiece, to Cardiff's Millennium Stadium because it can't be sure Wembley will be ready in time to host the May 13 game.

Behind Schedule

Multiplex today said it aims to finish the 90,000 seat stadium in May, four months late. Construction was delayed this month because of ``adverse wind conditions,'' the company said. Plans to remove the props supporting a 133-meter steel arch towering over the stadium have been delayed to the end of this month from mid- month.

The Wembley loss includes A$23.7 million in expected penalties for failing to meet the initial Jan. 31 completion deadline. Delays in handing over the stadium may cost Multiplex up to A$33 million in claims, with insurance covering the rest.

The company is running up A$327,216 in penalties a day.

The overall loss was blunted by earnings at Multiplex's real estate investment trust, which more than doubled to A$184.1 million, boosted by a A$92.7 million gain from property revaluations. Without that gain, the company would have posted a first-half loss of A$165.3 million.

Multiplex, which cut its profit forecast five times the past year, said today it expects to reach its full-year profit forecast of A$50 million, assuming no further write downs in the second half. The forecast now includes the gains from property revaluations, the company said.