An integrated service group postponed plans to sell off its resources subsidiary because of the panic caused COVID-19.
Downer Group confirmed it will suspend reviewing and selling Downer EDI’s Spotless Laundries business to Perenti Group due to major economic uncertainty caused by the Chinese coronavirus (covid-19).
‘Extraordinary’ volatility
“On 22 August 2019, Downer EDI Limited announced it was undertaking a review of its portfolio of businesses and that its mining business would be an important area of focus,” the group said in a statement to the stock market. “The review process relating to its mining business, including a potential sale, had been suspended due to the extraordinary market volatility caused by the covid-19 pandemic.”
The group is in no hurry to sell Downer Laundries as it is still performing well.
“Downer’s mining business is a leader in Australia with a proven track record and it is well positioned to build on its strong market position and pipeline of work,” Downer CEO Grant Fenn said.
Talks suspended
Both businesses have stopped holding talks and Perenti management expressed optimism about continuing the acquisition when market conditions improve.
Downer separately rejected media speculation from News Limited that the group was thinking about selling its “oil and gas sector-related operations.”
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“Downer confirms that the business is not for sale and no consideration is being given to its sale,” the business told the stock market on February 11.
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