Join our daily newsletter At The Bell to receive exclusive market insights
- NRW Holdings’ (NWH) subsidiary, Golding Contractors, sells the majority of its major mining equipment to Boggabri Coal Operations (BCO) under contract
- Boggabri exercised its option to acquire the assets under a maintenance services and hire agreement with NWH for the Boggabri coal mine
- Golding will sell 38 major mobile mining assets to BCO by the end of the month and continue maintenance on these, alongside 50 other assets, onsite
- CEO Jules Pemberton says the transaction will reduce debt and increase return on capital
- NRW shares are trading 7.8 per cent higher at $1.67 apiece at 2:12 pm AEST
NRW Holdings’ (NWH) subsidiary, Golding Contractors, will sell the majority of its major mining equipment to Boggabri Coal Operations (BCO).
Boggabri, as part of the Idemitsu Group, has exercised its option to acquire the assets under a maintenance services and hire agreement with NWH for the Boggabri coal mine.
Through the deal, Golding will sell 38 major mobile mining assets to BCO, targeting completion by the end of the month.
Following the sale, Golding will continue to service these assets onsite, in addition to a further 50 pieces of major mining equipment — engaging a workforce of more than 150 personnel.
The move by BCO is pegged to reduce group pre-tax earnings by around $1.8 million per annum.
The equipment will be sold for roughly $81 million, of which $64 million will pay down asset financing debt.
Accordingly, the transaction will reduce the company’s pro forma debt from around $115 million as at June 30 to approximately $34 million.
NRW’s CEO and managing director Jules Pemberton said the option for Boggabri Coal Operations to acquire all or part of the associated mining fleet was identified at the time of the acquisition of BGC Contracting.
“This transaction will reduce debt and increase return on capital employed. We look forward to continuing to support BCO to ensure we are best placed to continue to provide our services beyond the current contract completion date of December 2022.”
On Monday, NRW shares were trading 7.8 per cent higher at $1.67 each at 1:12 pm AEST.
