PERTH (miningweekly.com) – ASX-listed Cimic has announced the sale of a 50% interest in mining services provider subsidiary Thiess, which values the company at A$4.3-billion.
Cimic on Monday announced that it had entered into an agreement with funds advised by UK-based Elliott for the sale of a 50% interest in Thiess, with the transaction expected to strengthen Cimic’s balance sheet by generating proceeds of some A$1.7-billion to A$1.9-billion, and reducing the company’s factoring balance by approximately A$700-million and its lease ability by some A$500-million.
Cimic and Elliott will jointly control Thiess, as well as its financial and dividend policies, and the transaction will include customary future share transfer options, including a potential initial public offering or sale to a third party, and an option for Elliott to sell its interest in Thiess to Cimic between three and six years from completion.
The exercise of Elliott’s option would enable Cimic to potentially repurchase the interest now being acquired by Elliott at the lower end of the sale price, or fair market value.
“The sale agreement reflects Thiess’ ongoing strategic importance as a core activity for Cimic. It capitalizes on the robust outlook for the mining sector, and together with Elliott, we will pursue market opportunities in line with Thiess’ growth and diversification strategy,” said Cimic group executive chairperson Marcelino Fernandez Verdes.
Thiess is included in Cimic’s mining and mineral processing segment, and delivers opencut and underground mining in Australia, Asia, Africa and the Americas, and provides services to 25 projects across a range of commodities.