An embattled integrated service provider has found a new owner after the business experienced a major downturn.
Struggling Downer EDI has sold its Mining West business to MACA after the former reported a $150 million net loss for the 2020 financial year.
The $175 million deal sees MACA seize control of Mining West’s assets, contracts, equipment, employees and liabilities. The target has $1.1 billion of contracted work in hand as at 30 June 2020 plus a further $390M of work for fiscal 2021.
These contracts are based at:
- CITIC Pacific Mining’s Sino Iron Project (until March 2021+)
- Ansteel’s Karara Iron Ore Project (until March 2022+)
- Gold Fields and Gold Road Resources’ Gruyere Gold Project (until September 2023+)
- Fortescue Metals Group’s Eliwana Iron Ore Project (until August 2025).
Mining West also owns a surface mining fleet comprising of 65 dump trucks, 14 excavators and shovels, 11 surface drills and 36 other ancillary machines.
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MACA will fund the takeover by borrowing $130M from the Commonwealth Bank of Australia and raising a $75M on the Australian Securities Exchange through an institutional placement and pro-rata accelerated non-renounceable entitlement offer.
“The acquisition of the Mining West business provides MACA with a very meaningful addition of a large-scale mining fleet that is currently engaged across four long-life projects, all with quality customers that are well known to me and other key members of MACA’s management team,” MACA CEO and managing director Mike Sutton said in a public statement.