WELLINGTON, Feb 12 (Reuters): Fletcher Building Ltd, the biggest company in New Zealand's construction sector, said it needed more time to talk to its lenders and requested a two-day extension to a trading halt as it confronts a potential breach of debt covenants.
This highlights the pressure piling up on the builder that - reeling from cost overruns and deep losses at its projects - only last week flagged its fourth earnings downgrade in less than a year.
However, analysts say Fletcher's importance to the country's construction sector and broader economy would likely warrant a relatively favourable approach from its creditors, adding they did not think the company was at any risk of insolvency.
"They're working with their lenders to manoeuvre through obviously what is quite challenging times for them," said Kar Yue Yeo, managing director of Equity Research at First Capital NZ, adding Fletcher's size and status would help its case. "They've defaulted on their borrowing covenants but they're not struggling to repay their debts," he said.
New Zealand's No.2 listed firm by revenue has NZ$725 million ($525 million) in borrowings due to be repaid between 2020 and 2022, Thomson Reuters Loan Connector data shows.
NZ's Fletcher in talks with lenders as covenant breaches loom
FE Team | Published: February 13, 2018 00:10:58
NZ's Fletcher in talks with lenders as covenant breaches loom
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