Wembley developer hit by insolvency claim

WEMBLEY Stadium developer Multiplex has been forced to issue two statements insisting that it is solvent after an announcement that it was pulling out of the White City retail development triggered a massive stock market sell-off.

The company dismissed as rumour fears that the sale had been forced on it by financiers.

Its shares slumped 13% in Sydney after the company said it had sold its 12.5% stake in White City to Australian shopping centre specialist Westfield Group for £65m.

After the statements the stock recovered 2% and this morning was trading at about A$3.23. The company's second statement said it had substantial cash reserves and debt facilities and had been subjected to 'unfounded market speculation regarding the group's solvency and the possible involvement of the group's financiers in this and other recent asset sales'.

Multiplex stock has plunged 49% since February following the company's warning that it could barely break even on the Wembley project. But it insists there is nothing to worry about.

'The group's decision to sell its effective 12.5% minority interest in this asset to Westfield is consistent with a preference not to hold small minority equity interests in assets without some form of accompanying asset or property management role,' the company said.

Multiplex said the group 'continues to have substantial cash at hand and today has available to it undrawn debt lines in excess of $400m'. It said it remained committed to expansion in the UK.