Syntheo to record 'material loss' amid extended trading halt

Syntheo to record 'material loss' amid extended trading halt

Summary: NBN partner Service Stream has extended its trading halt until mid August as the company reviews its joint venture Syntheo, its arrangement with NBN Co, and its ongoing financing issues.

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TOPICS: NBN
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National Broadband Network (NBN) contractor Service Stream will likely remain in a trading halt until it releases its full-year financial results in August, amid discussions about future arrangements for joint venture Syntheo and with NBN Co.

Service Stream went into a trading halt in early June amid concern over the telecommunications arm of the company, and Syntheo, Service Stream's joint-venture company with Lend Lease.

It has been reported that Service Stream and Lend Lease are looking to end the joint venture, with Service Stream keen for Lend Lease to pick up the remaining construction work.

Syntheo has already been forced to hand back the construction contract for the NBN in the Northern Territory, after it was revealed in February that NBN Co would miss its target for premises passed by the end of June because of delays with Syntheo's construction work in the Northern Territory, Western Australia, and South Australia.

Service Stream said it has now "substantially concluded" a review of the Syntheo project, and there will be a material loss in the 2013 financial year associated with it. The organisation said that there are still ongoing discussions relating to the future of Syntheo, arrangements with NBN Co on project completion assumptions, and negotiations with banks on refinancing.

The trading halt was due to be lifted today, but Service Stream requested that the Australian Securities Exchange (ASX) extend it, with no end date listed. The company said, however, that it would expect the halt to be lifted by the time the company releases its 2013 financial year results on Wednesday, August 15, 2013.

Last week, NBN Co announced that the fibre network now passes over 207,000 premises. Up to 55,000 of these premises are believed to be what NBN Co terms as "service class zero", meaning that while the premises is technically classed as being "passed", it cannot yet order a service on the NBN.

Topic: NBN

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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2 comments
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  • NBNCo rejected all private sector tenders

    as too expensive. Appears those tending were right.

    Losses, poor quality construction, delays: the NBNCo mantra.
    Richard Flude
  • the most effective contracts are

    those that offer a win-win outcome. The onus is as much on NBN Co as the vendor to ensure the project can be delivered at the offered price.
    NBN Co when rejecting the original RAP responses should have taken a close look at the business case to understand why the price offered by the priceRFP responses were so different to expectation. I wonder if it was unpalatable to go back to Sen Convoy and ask for more money.
    Knowledge Expert