Multiplex chaos will not halt Wembley, says management

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The Independent Online

Wembley Stadium will be built and open in time for next year's FA Cup final, the venue's management insisted yesterday, despite the chaotic state of its main building contractor's finances and management.

Wembley Stadium will be built and open in time for next year's FA Cup final, the venue's management insisted yesterday, despite the chaotic state of its main building contractor's finances and management.

The controversial £757m project, which includes £120m of National Lottery money, has been plagued by disputes between the Australian group Multiplex, Wembley's prime contractor, and subcontractors employed on site.

Construction costs have overrun but Multiplex signed a fixed-price contract with Wembley National Stadium, a subsidiary of the Football Association, to build the venue that has subsequently left it financially exposed as costs have risen.

Multiplex agreed to build Wembley for £360m, promising its shareholders it would make a profit on the deal, raising fresh cash from them as recently as the end of last year. But in February Multiplex said spiralling costs would wipe out any chance of a profit, although the group's founding family agreed to provide a A$50m (£21m) indemnity against a deficit.

Yesterday it emerged that Multiplex's exposure to losses arising from Wembley could be much more than A$50m, prompting the company to call for a suspension of trading in its shares quoted on the Australian Stock Exchange.

The board was forced to admit it had no idea how big the losses could be, prompting the resignation of founder John Roberts as executive chairman, although he will stay on as a director. His son, Andrew, remains as chief executive. Another executive director, Noel Henderson, has also resigned.

The company's board is being hurriedly reconstituted to increase the number of independent non-executive directors to five, matching the number of executive directors, and also to include an independent chairman. It is seeking a new independent non-executive with experience of the UK property sector.

The company said it had been undertaking a review of "key aspects" of its operations to provide updated guidance for the market. A statement from Multiplex said: "The margin position on the Wembley project may have deteriorated significantly. The board ... does not have sufficient information to form a view as to the likely impact on earnings ... Multiplex group has requested a trading halt until it is able to ensure the market is properly informed."

It said it expected to be able to update the market on Monday. Until the full extent of its financial problems are known, doubts will persist about the completion of the new Wembley stadium, which has already pre-sold executive seats and hospitality packages worth more than £150m.

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