New Zealand-based construction company Fletcher Building Limited (ASX: FBU) shares and capital notes were placed in a trading halt on the Australian and New Zealand markets yesterday as the company completes the review of its Building and Interiors (B+I) projects.
The company will update the markets with the results of the review by Monday morning, after which the trading halt will be removed. According to a statement posted on the company’s website, the B+I business is expected to produce further losses beyond those revealed in October last year, likely resulting in a violation of Fletcher’s banking covenants.
This mirrors the company’s October 2017 trading halt following a downward revision of its profit guidance due to losses in the B+I sector. At the time, Fletcher’s share price suffered significantly, recovering from the fall just last week.
The full extent of Fletcher’s troubles will be revealed on February 21, when the company will release its half-year result.
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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.