Lendlease Shares Slide as Milan Sale Collapses, Erasing $90 Million and Exposing It to $160 Million Costs
The terminated deal removes about A$90 million in expected FY27 proceeds and could leave Lendlease funding major project costs if no alternative is reached.
KEY POINTS
SYDNEY — Shares of Lendlease Group fell more than 5% on Monday after the property group said the sale of its interest in a Milan development had fallen through.
Lendlease shares lost 14 cents, or 5.43%, to A$2.44, after trading between A$2.415 and A$2.56. About 3.3 million shares changed hands, valuing the company at about A$1.7 billion.
Sale terminated
Lendlease said the sale of its interest in the MSG North development rights, held by the Heartbeat Fund in Milan, had been terminated. Expected proceeds of about A$90 million in the first half of FY27 will no longer be received.
Lendlease is likely to fund about A$160 million in project obligations in the first half of FY27 if an alternative deal is not finalized by Dec. 31.
A troubled deal
The sale had been under pressure for months. In June, Lendlease agreed to sell the Milano Santa Giulia North development at a discount to book value, expecting a post-tax operating loss of about A$175 million.
The company had repeatedly extended the deadline after conditions went unmet, warning it could face A$160 million in project costs if the deal failed.
Pressure builds
A heavy statutory loss, a depressed share price and a November annual meeting have kept pressure on management.
The shares are down about 55% over the past year.
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