Leading mining and civil contractor NRW Holdings Limited (ASX: NWH) advises that Boggabri Coal Operations Pty Ltd (BCO), part of the Idemitsu Group, has exercised an Option to acquire the majority of the major mining equipment of Golding Contractors Pty Ltd (a wholly owned subsidiary of NWH) that is engaged under the Maintenance Services and Hire Agreement at the Boggabri Coal Mine.
The Agreement will see the sale of 38 major mobile mining assets from Golding to BCO with a target completion date of the end of July 2021. Golding will continue to perform maintenance services on site across these, and another 50 (approximately) pieces of major mining equipment, engaging a workforce of over 150 personnel on site.
BCO’s exercise of the Option will reduce group pre-tax earnings by circa $1.8M per annum. The equipment will be sold for circa $81 million of which circa $64 million will pay down asset financing debt. The transaction reduces pro forma net debt (unaudited) from circa $115 million as at 30th June 2021 (made up of cash of $145M and interest bearing debt of $260M) to $34 million.
NRW’s CEO and Managing Director, Jules Pemberton commenting on the Sale Agreement 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”