Shares in Fletcher Building Limited (ASX: FBU) dipped nearly 2% to A$2.88 in early trading after SkyCity Entertainment Group (ASX: SKC) initiated legal proceedings over delays to the long-running New Zealand International Convention Centre (NZICC) development in Auckland.
The legal claim seeks NZ$330 million in damages for alleged “breaches of contract, including those which caused the fire, constituted gross negligence, and/or a persistent, flagrant or wilful neglect to carry out obligations under the building works contract.”
Fletcher responded by confirming that it had previously disclosed “the risk of a dispute” regarding the NZICC’s timeline and cost blowouts, adding that it has already paid substantial liquidated damages to SkyCity in line with its contractual obligations. The company said it would “vigorously defend” against the casino operator’s claim.
Additional provisions of NZ$12–15 million have now been recognised, on top of the NZ$165 million reported in February 2024. Fletcher is also pursuing more than NZ$100 million in recoveries under its NZICC Third Party Liability insurance and has launched separate legal proceedings against the roofing membrane subcontractors, with a High Court case set to begin shortly.
Despite the legal stoush, both parties remain committed to opening the long-delayed convention centre in 2026.
SkyCity’s action follows recent regulatory scrutiny of its gaming operations in Australia and New Zealand. The company is awaiting the outcome of an independent review into its Adelaide casino licence.
SkyCity shares are currently trading at 87 cents.