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Multiplex warns of Wembley losses

News

WEMBLEY STADIUM contractor Multiplex warned of potential losses on the project this week as its majority shareholder put up a £19.4M indemnity against claims and legal costs.

he controlling Roberts family said on Monday that it would underwrite Multiplex's dispute with sacked steelwork subcontractor Cleveland Bridge (NCE 5 August 2004).

The move is intended to shore up investor confidence after Multiplex revealed claims would wipe out its profi t and 10% contingency on the £450M Wembley scheme. The news triggered a fall in its share price.

Cleveland Bridge is suing Multiplex for outstanding payment and for breach of contract, while Multiplex is counter-suing Cleveland Bridge. The case is due to be heard in April 2006.

It is thought that extra work resulting from design changes and unforeseen welding problems pushed Cleveland Bridge's £60M arch contract £10M over budget.

But announcement of the indemnity came with a second warning that losses could push the project into the red.

A Multiplex spokesman said that it was confi dent it could claw back costs to break even.

It is suing Cleveland for £17M.

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