RCR Tomlinson served with a class action after ‘catastrophic’ share price plunge
Engineering company RCR Tomlinson has been served with a class action from shareholders who have seen a “catastrophic decline in their share value”, as it extends its trading suspension amid delayed FY19 guidance.
It’s the latest bit of bad news at RCR Tomlinson (ASX:RCR) which last month sacked 115 electricians who were working on a 110-megawatt solar farm near Mildura.
The company says it’s been served with a shareholder class action, filed in the NSW Supreme Court, on behalf of shareholders who bought shares between 11 August 2017 and 27 July 2018.
“The company is considering the claim and a further update will be provided to the market shortly,” it said in a statement.
Litigation firm Quinn Emanuel is taking up the claim on behalf of shareholders. It issued a press release today saying hundreds of millions of dollars of shareholder value had been wiped out.
“Australian engineering and infrastructure company RCR went into a trading halt on 30 July 2018. On 28 August, it disclosed operational issues relating to two solar farm projects in Northern Queensland, which led to substantial cost overruns and a net loss for RCR for FY2018,” the statement said.
“On 30 August 2018, RCR shares were reinstated to the ASX. The share price fell by more than 60 per cent – from $2.80 to $1.05 – wiping out hundreds of millions of dollars of shareholder value.”
Shares are currently sitting at 87c.
“It’s unlikely that the recent alarming disclosures by the company could have come as a surprise to management – if they did, that’s worse. RCR shareholders have seen a catastrophic decline in their share value,” said Quinn Emanuel partner Damian Scattini.
RCR went into a trading halt on November 12 pending the release of full year 2019 guidance, but that turned into a suspension on November 14 and the company today requested an extension until November 27 “as the process of reviewing its earnings for FY19 and the associated consequences for its funding is ongoing”.
The Electrical Trades Union (ETU) seized on that trading halt as “evidence the company is in danger of going into receivership”.
The union has been campaigning against RCR due to reports they’ve heard about the Mildura sackings and concerns for workers’ job security at the company’s five Queensland sites.