Challenger Acquisitions Limited (LON:CHAL) saw its shares reverse today as the firm noted yesterday’s share price spike on US reports over the weekend that a new contractor had been found to finish the New York observation wheel but provided no confirmation that an appointment is imminent.
Having jumped around 24% higher yesterday, in late morning trading today Challenger was the market's biggest faller, with its shares down 22%, or 0.5p to 1.85p.
In a statement, the AIM-listed firm simply said: “Challenger looks forward to updating the market when a new contractor is formally appointed and a new date is set for the completion of the New York Wheel.”
The group also pointed out that, in an update to the market published in July, Challenger's chief executive officer, Mark Gustafson had noted that “despite the press speculation around the dismissal of the original contractor, Challenger was very confident that the New York Wheel project would be completed.”
Challenger has a US$3mln equity stake in the NY Wheel and took a hit a month ago when the design contractor Mammoet-Starneth was fired over a payment dispute.
That had led to fears the US$580mln project would not be finished, but things took a turn for the better over the weekend when the NY Wheel company confirmed it was close to appointing American Bridge to take over and finish the project.
American Bridge has already built the Las Vegas observation wheel, currently the world’s largest at 550, feet, but the New York version will be eighty feet higher. An even larger wheel is under construction in Dubai in the UAE.
A spokesperson for the New York Wheel consortium said a new completion date should be announced shortly, while confirming it was in advanced talks with American Bridge.
Expected to cost US$580mln, some US$400mln has already been spent on the NY Wheel.
Mammoet-Starneth was fired after New York Wheel said it had missed a number of construction and design deadlines, which has cost it US$16mln in damages and US$20mln in lost profits.
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