In a dramatic turn of events, Fletcher Building (ASX:FBU), a prominent trans-Tasman building products giant, had its shares suspended abruptly yesterday. The suspension followed a rapid decline of nearly 6% in just 8 minutes, followed by further unsettling news revealed by the company's lawyers 42 minutes later in a letter to exchanges.
At 1:45 pm, a mere 55 minutes after the shares had plummeted at 12:50 pm, the letter disclosed concerning developments. The shares had dropped from $A3.91 to $3.70 during this period, hitting a yearly low of $3.66 just before trading ceased.
The contents of the letter hinted at potential larger-than-expected write-downs, a bleak earnings outlook, uncertainty regarding an interim dividend, and the looming departure of CEO Ross Taylor. The board was scheduled to convene on Tuesday to deliberate on various matters, including provisions, impairments, earnings forecasts, and the CEO's tenure.
Fletcher Building Ltd, which had refrained from providing earnings guidance for several months, indicated that guidance would be released on Wednesday alongside the half-year results. Speculation arose about a potential equity issue, although vehemently denied by the company just the previous Friday.
The company's turbulent journey was further underscored by the revelation of potential losses amounting to $NZ180 million on troubled projects. Despite pursuing insurance claims, uncertainties lingered, potentially exacerbating the financial strain.
As investors and analysts await further clarity, the company's shares, down 17.6% year-to-date, reflect the apprehension and uncertainty surrounding Fletcher Building Ltd's future trajectory.
