NBN nightmare for telco builder
A company specialising in construction in the telecommunications industry has emerged from a trading halt lasting nearly a month, some expect the Service Stream firm to announce job cuts and sweeping changes this week.
Shares have not be bought or sold in Service Stream since June 12, after the company asked to be suspended from the ASX over problems with its fixed-communications division, including its NBN joint venture Syntheo.
Syntheo is a joint venture with Lend Lease, another Australian firm. Together they hold construction contracts worth hundreds of millions of dollars to build the National Broadband Network. The 50-50 split has been a troublesome one for Service Stream, earlier this year Syntheo was forced to renege on its contract to build the NBN in the Northern Territory because it had fallen behind in its obligations. Abandoning NT NBN works cost nearly $3 million in refunds, forcing Service Stream to downgrade its full-year earnings guidance to $20 million.
It is understood that while it has been suspended by the ASX, Service Stream has been hurriedly trying to to cut costs and negotiate a way out of its Syntheo partnership. Last week, a report in Australian media speculated around 100 jobs could be lost because of the NBN problems.
The 3 ½ week trading halt has left Service Stream’s shares frozen near an all-time low of 14c.