SkyCity sues Fletcher for NZ International Convention Centre delays (updated)

Skycity Entertainment

05/06/2025 22:27

Casino operator claims $199 million in damages

SkyCity shares up 10%; Fletcher shares fall more than 3%

Venue set to open in February 2026

Adds Fletcher statement in 6th & 7th paragraphs, shares in 8th & 9th, analyst comment in 12th & 13th

By Nikita Maria Jino

June 6 (Reuters) - SkyCity Entertainment SKC.NZ on Friday said it would seek damages from Fletcher Building FBU.NZ to cover losses incurred by delays in a convention centre project, putting its shares on course for their biggest single-day gain in about five years.

The company said it intends to file proceedings against Fletcher Construction - the head contractor for the New Zealand International Convention Centre (NZICC) - and parent Fletcher Building for what it called a range of contractual violations.

SkyCity claims include gross negligence and failures that it said may have contributed to a major fire at the site in 2019.

The casino operator said it is contractually entitled to over NZ$330 million ($199 million) in liquidated damages.

"SkyCity has attempted to resolve these claims by agreement with Fletcher but has been unable to do so," it said.

Fletcher Building rejected the allegations, saying it had already paid substantial liquidated damages for delays in the delivery of the site.

The construction material maker said it had completed main construction work and expects to hand over the site in the second half of this year.

SkyCity's share price rose as much as 10% to NZ$1.045 after the announcement, its highest since May 14 and putting it on track for its largest single-day gain since September 2020.

Fletcher Building's shares slumped 3.2% to NZ$3.05 as of 0110 GMT, their lowest since May 29.

The NZICC was touted as a flagship development in the heart of Auckland, New Zealand's most populous city. It has faced setbacks including pandemic-related disruption as well as the 2019 fire.

SkyCity expects the venue to open in February next year.

The entertainment company could be entitled to further damages depending on the terms of the liquidated damages clause and its cap, said investment adviser Jeremy Sullivan at Hamilton Hindin Greene.

"If SkyCity substantiates that the fire was due to contract breaches or misconduct beyond standard liability, this may open the door for uncapped or additional compensatory damages beyond the original terms," Sullivan said.

($1 = 1.6570 New Zealand dollars)

 (Reporting by Nikita Maria Jino in Bengaluru; Additional reporting by Sneha Kumar; Editing by Pooja Desai and Christopher Cushing)

 ((Nikita.Jino@thomsonreuters.com;))