NBN Co construction partner Service Stream has again extended its trading halt on the Australian Stock Exchange pending an announcement about Syntheo.
Syntheo is a 50/50 joint venture with Lend Lease and Service Stream and is responsible for construction of the National Broadband Network in Western Australia and South Australia, after handing back work in the NT to NBN Co. The company expected to face a cost of around $3 million associated with its exit.
The company has been in a trading halt since 13 June and has requested the trading halt remain in place until 8 July.
“The company requires a further period of time to clarify a number of issues within its fixed communications segment, including examining the impact on its result of the performance of the Syntheo joint venture,” the company said in a statement.
“The company understands that its FY13 profit guidance will be impacted by the outcomes of the Syntheo project review and the issues within the fixed communications segment.”
Service Stream previously issued a statement requesting a trading halt until 24 June to “clarify a number of issues” in its fixed communications division.
Syntheo has been a key construction partner with NBN Co for the rollout of the NBN in several states, but it has struggled to meet its construction targets.
In mid-February this year NBN Co downgraded its June 2013 target for the number of premises passed due to construction delays from the joint venture.
Syntheo was responsible for passing 48,620 premises in SA, WA and the NT by June 2013 – 17 per cent of the 286,000 target for June. The June target has now been revised to as few as 190,000.
Communications minister Stephen Conroy recently told Computerworld Australia NBN Co made the decision to downgrade premises passed targets for June despite construction partners “arguing they could still meet their targets”.
While the company was due to front a parliamentary hearing about its involvement in the construction delays for the NBN, it failed to show and instead sent a Lend Lease representative who was unable to answer questions regarding Syntheo's role in the delays.
The <i>Australian Financial Review</i> reported the joint venture is on the “brink” of pulling out of its involvement in the NBN.
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