How to blow several million dollars a week

Australian construction firm faces financial chaos after problems with soccer stadium. Edited by Sarah Matthews.

  • E-Mail
By  Sarah Matthews Published  February 26, 2006

|~||~|BIG BILL: Jon Bon Jovi may have to cancel Wembley concert.|~|Australian construction firm faces financial chaos after problems with soccer stadium. Edited by Sarah Matthews. LATE PENALTY Probably the worst company in the world to be an investor in right now is Australian construction firm Multiplex. Just four years ago, the company was the darling of the Australian Stock Exchange, having won the prestigious US$1 billion contract to build the new London Wembley soccer stadium. It was due to be handed over to the English Football Association next month. But, after a series of delays, Multiplex told the Australian Stock Exchange last week that it could no longer guarantee completion in time for the English FA Cup Final on May 13. That match has now been switched to Cardiff. The bad news for Multiplex is that under the terms of its building contract, it will be fined US$2 million for every single week’s delay in completing the project. But far worse could be to follow: the new Wembley is also due to host concerts by Bon Jovi, the Rolling Stones and Robbie Williams this summer. On top of the US$2 million a week fine, Multiplex faces lawsuits of around US$8 million from each of the performers forced to cancel their shows. Not surprisingly, Multiplex’s shares are in freefall. And there appears to be little hope of the price recovering. BAD MATE I know a few people who were given an i-mate phone as a Christmas/New Year’s present, and by all accounts they are very happy with their gifts. And so they should be – they really are fabulous products. Less could be said of i-mate shares, currently registered on the London Stock Exchange. Anyone who got these as a Christmas present would initially have been rather pleased, with the share price at 322p on December 28. By last week, it had tumbled to 260p, following a poor trading statement put out by the company earlier this month. To put it bluntly, those i-mate shares have tumbled by 20% in around two months. Still, the company’s Dubai-based owner Jim Morrison is still in the millionaires’ league, so he won’t be too unhappy. Yet. RISING TIMES As I’ve been predicting, what goes down must come up (eventually!) and so I’ve been proved right on the Dubai Financial Market. After taking a pounding in the past few weeks, I’m glad to say that normal service appears to have been restored. Emaar shares have risen nearly 3% in the past week, while Kuwaiti property firm Al Mazaya made an impressive debut, with its shares soaring 7% on the first day of trading. For all the doom and gloom about property shares, they still look like the best bet in the Middle East market. Some of the boost has come because of the Dubai International Property Week show taking place, but I’m pretty sure it will last beyond that. FAST CASH Okay, I know I am rather obsessed with the sport of Formula One racing – but who can blame me? The Bahrain Grand Prix will roar away in just two weeks time — and a fantastic race it is expected to be too. But who will be the highest paid driver on the day? No, not Michael Schumacher — or even the current world champion Fernando Alonso. My spies in the sport tell me that BAR Honda driver Jenson Button has negotiated a US$1 million sponsorship deal with a range of firms appearing at the race, including Gulf Air. It means that even if Jenson stalls his car on the starting grid, he will still pick up a fair amount more cash than the winner of the race. FLOATING AWAY Interesting to see that the very capable Sheikh Ahmed has become chairman of the newly created Dubai Aerospace Enterprise (DAE), a US$15 billion project which aims to give Dubai a huge chunk of the aerospace market. Now that’s quite a lot of money for DAE to put upfront in order to get its production facilities going. So where will it all come from? Word is that Sheikh Ahmed is considering a flotation of DAE before it really gets going — similar to the one he has been planning for Emirates Airline over the past year. Watch this space for more details, which are expected soon.||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code