Laing woe continues

Exclusive by John Leitch



Laing continues to leak bad news on the state of its construction business, revealing on Monday (23 July) that a further £70m has been heaped onto the losses already known.

Rather than pay the expected figure of £30m for Laing Construction, would-be buyer O'Rourke will instead be given the business. In addition, the John Laing Group will take an additional £40m hit to cover liability for contract losses and latent defects.

The latest revelations take Laing's cumulative construction losses to a total of £200m. In exchange for not having to pay out £30m to buy Laing Construction, O'Rourke is taking on more risk than was previously expected. The deal now being hammered out is that only one project's liabilities stay with John Laing - the part-built National Physical Laboratory (NPL) in north London.

John Laing appointed Bechtel, which has six senior staff in place, as its management consultant a week ago to help it complete the NPL scheme after the construction business has been sold to O'Rourke.

The spokesman continued: "The announcement on Monday marks stage one of the disposal of Laing Construction. Everything will be finalised by the end of July or early August.

"O'Rourke's due diligence process is all done: we're just waiting for both sides' lawyers to tidy things up."

A Laing statement on Monday said: "The board is disappointed that it has not proved possible to achieve terms for the sale of Laing Construction which are more favourable for the group."

As CJ went to press on Monday it was rumoured that Brian May, chief executive of Laing Construction, had left and that David Anderson, currently with O'Rourke, was about to take over.