Fletcher Building sells off more assets
Fletcher Building has sold a major asset and plans to resume paying dividends to shareholders next year.
The company said it’s going to sell its Formica laminates business to Dutch based company Broadview Holding for NZ$1.22 billion(FJ$1.77 billion). Chief executive Ross Taylor said the sale is part of Fletcher’s plan to quit non-core businesses and stay in its home markets. “Our five year strategy is to refocus Fletcher Building’s capital and capability behind our New Zealand and Australian businesses, with building products and distribution at our core.” Fletcher Building bought the Formica business, which employs more than 3,400 people in North America, Europe and Asia, in May 2007 for NZ$947m(FJ$ 1,376 m).
Last month it sold its roofing business for NZ$57m(FJ$82 m) to a Canadian firm.
The restructuring and asset sales follow Fletcher’s losses of close to NZ$1(FJ$1.4 m) billion over two years in its big projects construction business.
The big losses and a breach of its banking agreements forced Fletcher Building to beef up its finances by selling new shares, selling assets, and suspending dividend payouts to shareholders.
Mr Taylor said the company is now in a position to resume dividends.
“The decision to reinstate the dividend was based on Fletcher Building board’s confidence in the company’s trajectory and return to profitability in FY19 (financial year 2019).”