Friday 4th July 2008
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Infratil, which owns 30% of the company, has agreed not to sell its stake until the completion of the review, which may take three-to-six months, it said in a statement. Shares of Infratil rose 1.7% to NZ$1.80.
Queensland-based EDL plans a conference call later today. The shares have about halved in value the past 12 months. The value of Infratil's investment fell to NZ$110 million in March from NZ$207.4 million in the same month of 2007.
Infratil's latest annual report says EDL hasn't delivered on expectations over recent years because of problems with engines used in US plants and cost overruns at its West Kimberley project in Western Australia.
"These problems are being surmounted and EDL remains in a sector with great growth potential" Infratil's report said.
Costs to complete the West Kimberley project soared to A$320 million from an initial budget of A$180 million, reflecting the mining boom in Western Australia, which caused delays and drove up prices charged by construction firms, according to Infratil.
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