Kalkine: Fletcher Building Faces Legal Action from SkyCity Over NZICC Delays

June 06, 2025 01:48 PM AEST | By Team Kalkine Media

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Kalkine: Fletcher Building Faces Legal Action from SkyCity Over NZICC Delays — Image source: shutterstock

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Highlights:

Fletcher Building Limited (ASX:FBU) shares dipped following legal action initiated by SkyCity Entertainment Group

SkyCity seeks damages citing contract breaches and delays in the NZICC project

Fletcher plans to defend the claims and pursue recoveries under third-party liability coverage

Fletcher Building Limited (ASX:FBU), part of the ASX 200 index, experienced early session weakness after SkyCity Entertainment Group (ASX:SKC), also listed on the ASX, launched formal legal proceedings tied to ongoing issues with the New Zealand International Convention Centre (NZICC) development in Auckland. The companies are both prominent entities within the construction and entertainment sectors respectively.

The claim centres on alleged breaches of contract involving significant project delays and other related matters. The legal filing references a range of concerns including gross negligence and non-compliance with building obligations. This development comes amid a broader scrutiny of major infrastructure projects in the region.

Fletcher Acknowledges Previous Disclosures and Ongoing Financial Exposure

Fletcher responded by confirming that the possibility of a dispute had been disclosed previously. The company noted that it had already met some contractual obligations through liquidated damages payments made to SkyCity. Additional financial provisions have now been set aside to account for the ongoing developments.

The company continues to pursue recoveries through its NZICC Third Party Liability insurance coverage. It has also initiated its own legal proceedings against subcontractors involved in the project, including those responsible for roofing membrane work. A related court case is expected to begin soon in New Zealand’s High Court.

SkyCity Maintains Commitment to Project Despite Broader Challenges

SkyCity Entertainment Group has faced broader operational reviews across its gaming venues in both Australia and New Zealand. An independent review concerning its Adelaide casino licence is still pending. Despite these regulatory developments and the legal tension with Fletcher, SkyCity has reaffirmed its intention to see the NZICC project completed and opened as planned in the upcoming year.

Shares of SkyCity Entertainment Group (ASX:SKC) also showed minor fluctuations following the announcement. The legal dispute adds to the ongoing operational and reputational focus the company is navigating.

Market Reaction and Broader Index Implications

The situation has contributed to trading volume and investor attention across the construction and real estate development segment within the broader ASX 200 index. Market participants continue to assess the implications of legal disputes on corporate earnings and project timelines.

While the current dispute has added to project uncertainty, both companies have reiterated their commitment to the eventual completion and launch of the NZICC. This underscores the ongoing importance of the convention centre to regional development initiatives and tourism infrastructure.

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