Leighton in 'crisis' talks

AUSTRALIA’S biggest construction group, Leighton Holdings, is expected to make significant write-downs on some of its largest projects as the end of the 2010-11 financial year looms.
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Staff Reporter

The Sydney Morning Herald has reported the Leighton board held crisis talks on Thursday to discuss how it could justify its 2011 profit forecast of $480 million and pacify potential credit rating downgrades.

Following the meeting Hochtief, Leighton’s biggest shareholder, released a statement saying the Australian company’s earning’s review would likely have “significant adverse effects” on a forecast.

The SMH reported Leighton’s problems stem from payments for its Middle East operations not going through, worsening conditions at the contentious Brisbane Airport link and issues with the Victorian desalination plant.

Leighton shares were placed in a trading halt yesterday at $28.94, but are expected to begin trading again on Monday with the release of the revised profit forecast.

“To add to the complications, Hochtief is in the process of a hostile takeover bid from the Spanish company ACS, which now has 43% of the stock,” the Fairfax service reported.

“When Leighton shares resume trading, they are expected to plunge, which will have a domino effect on Hochtief's shares and make them cheaper for ACS.”

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