19/10/2020 - 11:00

CIMIC sells Thiess for $2bn

19/10/2020 - 11:00

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CIMIC Group has confirmed the 50 per cent sale of its mining contractor, Thiess, to an entity based in the UK.

CIMIC sells Thiess for $2bn
CIMIC is selling 50 per cent of its stake in Thiess for between $1.7 billion and $1.9 billion. Photo: CIMIC Group

CIMIC Group has confirmed the 50 per cent sale of its mining contractor, Thiess, to an entity based in the UK.

It comes nearly three months after CIMIC announced the likely sale to Elliott Advisors, a subsidiary of global investment firm Elliott Management.

Elliott will pay between $1.7 billion and $1.9 billion for joint control of Thiess, which CIMIC says is the world's largest mining services provider.

Thiess has about 14,000 employees operating in Australia, Asia, Africa, and North and South America, with a current portfolio of 25 projects.

The NSW-based business generates annual revenue of more than $4.1 billion.

“The sale agreement reflects Thiess’s ongoing strategic importance as a core activity for CIMIC,” CIMIC chairman Marcelino Fernandez Verdes said.

“It capitalises on the robust outlook for the mining sector and, together with Elliott, we will pursue market opportunities in line with Thiess’s growth and diversification strategy.”

CIMIC said the sale would generate a pre-tax gain of about $2.2 billion for the company, as well as reduce its factoring and liability balances by about $700 million and $500 million, respectively.

The announcement comes 10 days after CIMIC disclosed a 17 per cent drop in its net profit over the past nine months to September 30, reporting $474 million in NPAT compared with $573 million the same time last year.

CIMIC shares were up 6 per cent at 12:43pm AEDT to trade at $22.17.

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