Emeco has denied that it is involved in a potential transaction for Downer EDI’s mining business.
A news report in The Australian suggested that the Emeco Group was in the hunt to acquire the Downer division.
Emeco responded to the report on the ASX today by distancing itself from the speculation.
“Emeco explores opportunities to add value to the Emeco Group and its shareholders on an ongoing basis,” the company stated in the announcement.
“However, Emeco is not a bidder in the sales process of Downer Mining.”
Downer announced in December 2019 that it was reviewing the future of its mining business, noting its excellent workers and proven track record, but calling it “very capital-intensive”.
The contractor completed a portfolio review during the September quarter of 2019 to identify its opportunities for realignment. Downer chief executive Grant Fenn confirmed its mining business was a focus area of the review.
According to Fenn, mining contributed to approximately 12 per cent of Downer’s profit in the 2019 financial year but required over 50 per cent of the company’s total capital expenditure to achieve this.
Downer’s mining business services more than 50 sites across Australia, Papua New Guinea and Southern Africa, including Newcrest Mining’s Cadia Valley gold mine in New South Wales and BHP’s Goonyella Riverside mine in Queenland.
Perth-based Emeco Group is one of the world’s largest rental equipment companies, servicing the mining industry with trucks, excavators, dozers, loaders and graders.