Hochtief chief exec quits as profit halves

 
City A.M. Reporter
GERMANY’S largest construction company Hochtief said its chief executive Herbert Luetkestratkoetter would step down as of 12 May, and will be replaced by fellow board member Frank Stieler.

The company said his departure was “by mutual agreement on the basis of a separation agreement” sealed on Sunday. It did not give further details.

Luetkestratkoetter’s departure is not a surprise as he has been fiercely resisting a lowball bid by Spanish peer ACS last year aimed at enabling it to buy Hochtief shares in the open market.

ACS, which holds about 41 per cent of Hochtief shares, now wants to double the number of its supervisory board seats at Hochtief to four of a total of eight seats.

Hochtief’s new chief executive Frank Stieler has been a member of Hochtief’s executive board since March 2009. He heads the newly created Hochtief Europe division.

Spanish builder ACS is backing the appointment, according to the Hochtief supervisory board.

Hochtief’s shares have fallen nearly 10 per cent since Australian contractor Leighton, in which it is the majority shareholder, warned last week that it was about to cut its guidance and announce a new profit forecast.

Leighton, hit by mounting project costs and writedowns on its Middle East business, said it would raise A$757m (£489.5m) to shore up its balance sheet, with Hochtief taking up its full 54 per cent entitlement.

Hochtief did not immediately say how it plans to fund the purchase.

In a separate announcement, Hochtief said it expected its group profit before tax to halve this year as a result of Leighton’s loss.