AusGroup’s Australian businesses will likely be sold after the contractor’s Singaporean parent entered restructuring, but the company has promised no disruption to local operations.
AusGroup’s Australian businesses will likely be sold after the contractor’s Singaporean parent entered restructuring, but the company has promised no disruption to local operations.
The sale process has been under way for a few weeks, with the AGC and MAS business units on the market.
The contractor employs more than 1,000 people, and has works including a 10-year maintenance deal with Chevron.
“All the proposed purchasers of the Australian business are financially strong, have complimentary service offerings and are highly supportive of the future of AGC & MAS,” AusGroup said in a statement today.
“The Australian management team believes a proposed sale will strengthen the future viability of the AGC and MAS businesses and for this reason is in favour of the transaction.”
AusGroup’s Singapore-listed parent appointed Deloitte as a restructuring adviser on 10 November, and the big four giant is now acting as interim judicial manager of that business.
The parent business owed $132 million as at June, according to its annual report.
It made a net loss of $31.7 million in the year to June, with a $50 million current asset shortfall, the report said.
AusGroup had $41.7 million of outstanding debt notes which mature next week, and a $27.5 million shareholder loan which it said would need to be restructured.
One big challenge has been work at the East Rockingham Waste to Energy plant, which is being built by Acciona.
Shareholders were told at a recent annual general meeting that AusGroup had suffered funding pressures due to non-payment on that project.
“No disruption”
Yesterday, it was reported that the Offshore Alliance union had concerns about worker entitlements amid the Singaporean administration.
Chief executive Shane Kimpton rebuffed those concerns when asked by Business News today, saying operations would continue and worker payments would be above board.
The Australian business units are not under administration.
“The (Singapore Exchange) announcements make it clear that there is no disruption to the operations of AGC and MAS which are the Australian entities,” AusGroup said in a statement.
“From an Australian perspective, we remain focussed on the future and continuity of existing services to our valued clients.
“We have a strong pipeline of current and future projects, and we are exploring a range of alternative funding options which are independent of the Singapore Company.
“We have a long history of delivering exceptional service to clients and of being an employer of choice.
“This will not change.
“We remain committed to exceeding client expectations, using our market-leading engagement approach and service delivery model that has met the needs of our clients over many decades.”
