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Downer progresses talks to sell mining unit, hires bank - Report

Mining News - Published on Thu, 15 Nov 2018

Image Source: Financial Review
Financial Review reported that Downer is pressing ahead with negotiations to sell its mining services division to an offshore party. Street Talk can reveal the Grant Fenn-led company has hired Deutsche Bank to oversee the discussions, which could see one of the largest mining services businesses in the country move into overseas hands. This column first reported on October 25 that an international buyer had approached Downer and the two parties were in early-stage deliberations. Reports that a management buy-out is under consideration are wide of the mark, sources said. Mining services now accounts for about 12 per cent of Downer earnings, which is down from well above 40 per cent recorded at the peak of the resources boom.

Downer has been struggling with falling earnings in mining business, and this year said it would combine its mining operations with its engineering business as it diversifies into a broader range of services following its acquisition of Spotless.

Downer announced a USD 77 million pretax write-down on goodwill in its mining operations in early February. The company has lost two key mining contracts in recent years - its Christmas Creek iron ore contract with Fortescue Metals Group in Western Australia, which went in-house, and its Boggabri coal mine contract with Japan's Idemitsu group in NSW, which went to BGC Contracting.

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Posted By : Rabi Wangkhem on Thu, 15 Nov 2018
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