Syntheo pulls out of NBN construction

Syntheo pulls out of NBN construction

Lend Lease will control the delivery of Syntheo’s remaining obligations under NBN Co

NBN Co contractor, Syntheo, will cease its construction contract ties with NBN Co.

Syntheo is a joint venture between Lend Lease and Service Stream.

Service Stream has also reached a new agreement with joint venture partner, Lend Lease, to control the delivery of Syntheo’s remaining obligations under the agreement with NBN Co, subject to the satisfaction of certain conditions.

Syntheo was appointed as a construction partner in 2011 for the Northern Territory and South Australia. At the time, the value of the contract was about $141 million and had the potential to be bumped up to $341 million, if it was extended for two more years.

Service Stream is expecting a material loss for the project in the 2013 financial year of about $30 million EBITDA from its fixed communications segment, after the allocation of corporate costs.

This also includes an EBITDA loss of $20 million from the Syntheo joint venture. But it expects an EBITDA profit from the balance of its operations - mobile communications, energy and water, and unallocated corporate costs, for 2013 financial year of about $18.5 million.

Overall the company expects an EBITDA loss of about $13 million, with a net debt of about $52 million as at June 30. It will also take a non-cash goodwill impairment charge of about $90 million.

It will release its audited full year results in the coming weeks.

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Tags nbn coService StreamLend LeaseSyntheo

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