(Reuters) - Shares in Kier Group fell more than 16 percent on Monday after the British builder disclosed an accounting error that pushed up its debt for 2018, months after many shareholders refused to buy into a new issue of stock.
Kier, which has contracts for major construction projects in Britain including London’s Crossrail link, said its debt at the end of the year was of 180.5 million pounds, compared to 130 million pounds announced in January.
The company said it was still on track to meet its underlying 2019 expectations and expected to return to a net cash position by the end of June. reut.rs/2VOL5tJ
Finance Director Bev Dew said an internal review led to an accounting restatement after the reclassification of 40.2 million pounds of debt associated with an asset resale.
“We are not actually selling that debt when we sell the asset, so as a consequence there was an error and we have bought that debt back to the balance sheet,” Dew said.
The builder also re-calculated its average month-end net debt for the six months ended Dec. 31 to 430 million pounds, 60 million pounds higher than previously stated.
Kier, which builds and maintains highways, railway tunnels and houses, has said the growing pessimism among bankers, who were cutting their exposure to the industry after the collapse of rival Carillion, hit its share issue plan in December.
Chief Executive Haydn Mursell had quit after the share sale snub.
Before Monday’s announcement, Kier’s combined credit score - which measures how likely a company is to default in the next year on a scale of 100 (very unlikely) to 1 (highly likely) - was 7, Refinitiv Eikon data showed.
Reporting by Karina Dsouza and Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty and Edmund Blair