LONDON-Multiplex is facing further delays to the new euro 1.1-billion ($1.3-billion) Wembley stadium it is building for the Football Association. The FA has now had to relocate a string of pop concerts and sporting events.
The stadium was due for completion in January this year and already there is a dispute over who is to blame for delays and whether Multiplex is liable for the penalty charges of euro 200, 000 ($244,000) a day for being late. Now the FA has suggested no new events will be held there until 2007. Pop concerts by Take That, Bon Jovi, Robbie Williams and the Rolling Stones as well as a number of football matches and Rugby League's Challenge Cup final have had to be relocated.
A statement by Multiplex claims the delays are due to a subsidiary of the FA that demanded design changes that slowed construction. It added that the company "is entitled to substantial and legitimate extensions of time under the terms of its construction contract, which will extend the contract completion date until at least September 2006."
But FA officials has repeatedly said they were confident that Multiplex was fundamentally to blame for not having the venue ready on time. Their major concern is the lost revenue from planned events, including a number of pop concerts. A spokesman for Robbie Williams said: "Wembley Stadium today announced that they will not be able to accommodate the scheduled run of events for autumn 2006 including the Robbie Williams concerts. Alternative arrangements for Robbie's Wembley dates are being made and an announcement as to the venue will be made as soon as the details are confirmed."
All the non-football events would have earned the FA money and instead will now cost it in cancellation fees. The FA had also been due to make the first repayment of loans in September but has now started talks with its bankers to renegotiate.
The Wembley project has been dogged by a series of problems, forcing Multiplex to issue six profit warnings last year. The company also announced in a statement that it is in negotiations to obtain waivers from its financiers over breaches of covenants triggered by its more than euro 382-million ($465-million) losses on the project.
In a separate development Goldman Sachs has retained its negative view on Multiplex. A brokers note said ongoing risks for Multiplex and the continuing negative news made it difficult to find upside in the stock.
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