Watpac nears deal for mining and civil business

Image: Watpac.

Contractor Watpac is negotiating the sale of its civil and mining business.

The company today revealed that it is undertaking due diligence with a potential buyer of this part of the business.

Watpac is working towards executing the legally binding documentation and completion of the transaction with the unnamed company.

“The proposed transaction has an assessed potential value broadly in line with the current written down value of the company’s assets,” Watpac said in an ASX announcement.

“Further announcements will be made as necessary in relation to the progress of the transaction in accordance with Watpac’s continuous disclosure obligations.”

The Watpac business also includes construction, speciality services and property units.

Watpac’s overall performance has been hurt by its mining and civil business this year. Despite the company’s construction division recording a $20.6 million profit during the 2018 financial year, this was offset by impairments and restructuring resulting from a strategic review into the mining and civil area.

The company’s mining contracts have included the Mt Magnet gold mine and Nullagine iron ore operation, both in Western Australia.

In October, Watpac also received an off-market takeover offer from Belgium’s BESIX Group. An independent board committee formed at Watpac recommended that its shareholders accept the 92 cent per share bid.

Headquartered in Perth, Watpac Civil and Mining employs around 400 people.