LCL Hit By Arabtec Claims!

The bad news keep coming for LCL!

On Business Times: LCL: Arabtec makes claim

• LCL: Arabtec makes claim
  
  Published: 2009/06/06
  
  AN ADVANCE payment of 25.4 million UAE dirham (AED100 = RM97.39) made to LCL Corp Bhd for interior fit-out works for a Dubai project is being re-claimed, it told Bursa Malaysia.
  
  LCL’s Dubai based unit LCL Interiors Contracting LLC (LCLIC) was previously awarded the subcontract for interior fit-out works for Tiara United Towers by Arabtec Construction LLC but LCLIC’s part was later omitted due to project changes.
  
  LCLIC had received an advance payment of AED 39 million which was secured against an equivalent sum of advance payment bond issued by the bank.
  
  LCLIC had also issued a performance bond of AED 15.6 million to Arabtec being 10 per cent of the total contract value.
  
  Arabtec has now made a claim on the advance payment bond for AED 25.4 million.
  
  The financial impact for the LCL group includes a net cash flow impact of AED 25.4 million, an increase of net gearing ratio to 2.92 times from its current 2.75 times, and an additional loss recognition of AED 3.1 million.

Ouchhhhh!!!!

Recent postings on LCL

• LCL and Its Dubai Woes
• Some Thoughts On LCL
• Update On LCL
• Warning Sign On LCL As It Misses Deadline To Submit Audited Reports!

Here's LCL latest balance sheet.

As can be seen, the balance sheet is rather stretched!

And here are two contrasting views on LCL after it announced its earnings.