Ausenco has entered an agreement with private equity firm Resource Capital Fund (RCF) to acquire the contractor for $153.7 million.
The company formed an Independent Board Committee (IBC) to consider RCF’s proposal to privatise it, with shareholders set to vote on the scheme in August. The committee has recommended its shareholders vote in favour of the scheme, with the largest shareholder, First Samuel, outlining its intentions to do so.
Other shareholders, including Spanish manufacturer Duro Felguera, have entered agreements to keep their holdings in the company.
The engineering and construction group had more than $60 million in debt that was expected to mature in August, and faced challenges paying back the amount without affecting its shareholder base, in a report by The Australian.
The company also suffered a net loss of $86 million in the last financial year due to low commodity prices.
Chairman of Ausenco and the IBC, George Lloyd, said it was in the best interests of the shareholders to agree to the privatisation.
“The proposal is at a significant premium to market value and on terms which, given the circumstances that we face with the near-term maturity of our secured debt, we believe reflect fair value,” he said.
“Ausenco operates in a dynamic and challenging market which would present ongoing uncertainties and risks to the company if it were to continue independent operation. In that context, the IBC believes that shareholder value will be maximised and Ausenco will be best positioned to succeed in the future through the proposed transaction.”