This article is from the Australian Property Journal archive
LENDLEASE has wasted no time making good on Monday’s $4.5 billion promise of jettisoning its offshore projects, announcing it had struck a deal to sell its United States construction business.
“Today’s announcement represents another step to simplify Lendlease to create a more focussed company for securityholders,” Lendlease CEO Tony Lombardo said.
“It’s the culmination of more than 12 months’ work refining our US construction activities to focus on the US East Coast where we have a clear competitive advantage.”
US construction firm Consigli will acquire Lendlease’s east coast construction operations including approximately 45 current, under contract and pre-construction projects. As part of the sale, the majority of Lendlease’s US construction workforce will transition to Consigli.
Lendlease this week said it would book a writedown of up to $1.48 billion as it bowed again to pressure from frustrated investors, promising to offload its problematic international operations.
As part of the overhaul, Lendlease said it will recycle $4.5 billion of capital by exiting its international construction business and accelerating capital release from its offshore development projects and assets.
Key shareholders, including Aware Super and John Wylie’s Tanarra Capital have been pushing hard for management change – effectively claiming the scalp of chair Michael Ullmer, who will be stepping down in November – following a string of soft results and returns, and ongoing scepticism around the viability of its overseas activities.
Lendlease has a number of projects on ice in the United Kingdom, United States, Malaysia, China, Singapore and Italy, a legacy of the company’s attempts to take advantage of then-low interest rates and higher values, and the cycle turning against it, making the numbers difficult to stack up. Shareholders have wanted a simpler company, focussed on its projects at home. Lendlease is readied to deliver, while keeping its international investments platform.
Lendlease said key contract terms of the Consigli deal remain commercial in confidence until transaction completion, which is expected to occur in the first half of FY25.
