Forge eyes potential losses on power contracts

Forge Group has halted trading in its shares over potential losses on two power station contracts.

The engineering company said internal monthly reviews had identified concerns about potential underperformance at Rio Tinto's West Angelas project in the Pilbara and the Diamantina project near Mt Isa, Queensland.

Forge said it requested the halt to clarify the status of the projects and prepare an earnings guidance and outlook for this financial year.

The two contracts have a combined value of about $570 million.

Forge picked up the projects when it bought CTEC in early 2012. CTEC has since been rebranded Forge Power.

The West Angelas power station is part of Rio Tinto's expansion of iron mining in the Pilbara. Forge is scheduled to complete construction of the 80 MW facility next January.

At the time of buying CTEC, Forge said the Rio contract was worth about $150 million.

The $570 million Diamantina project is a 242 MW station being developed by APA Group and AGL Energy to supply power to North West Queensland.

The contract value was quoted last year as about $420 million. Completion is expected next June.

Forge's shares last traded at $4.18.

The West Australian

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