German industrial company Kaefer GmbH has agreed to acquire the operating assets of its listed Australian subsidiary, Kaefer Technologies.
The conditional transaction includes the German parent assuming the debts of its loss-making Australian subsidiary, which was placed in administration three months ago.
Administrator Jeff Herbert of PPB said if the sale proceeded, the consideration for the assets was likely to be “well in excess of the market value of those assets”.
He said the sale would also preserve jobs in the group, which has about 270 staff, and result in the payment of all debts to creditors.
Mr Herbert noted the Australian subsidiary, whose clients include BHP Billiton’s Boodarie Iron, Western Power and CSBP, is insolvent and would be unable to continue trading without the support of its German parent.
“No other alternative proposal has been received by the administrator which would avoid the loss of most employees’ jobs, the liquidation of the group entities and substantial losses to creditors,” Mr Herbert said.
Kaefer executive director Horst Koerner said clients had expressed their continued support for the group.
He said about 15 staff would be affected by BHP Billiton’s decision to lay-off maintenance contractors at its Boodarie Iron plant.
The affected staff would be given work on other projects.
Mr Herbert said the sale was conditional on creditors approval of a deed of company arrangement under which known trade creditors would be paid 100 cents in the dollar.
As well as selling the operating subsidiaries, Mr Herbert is endeavouring to sell the listed ‘shell’ company, Kaefer Technologies.
He is aiming to complete both sales by December 1 2004.
The sale includes an agreement by Kaefer GmbH to underwrite the sale of a property in Malaysia, which is currently owned by the Australian subsidiary, for $1 million.
Last week’s sale announcement came just two days after shareholder activists Gerald Pauley and Gordon Elkington lodged a second application with the Takeovers Panel.
The Takeovers Panel has not decided whether to take any action in relation to their application, which alleges “unacceptable circumstances” in relation to the proposed sale of the operating assets.
Two months ago, the Takeovers Panel rejected an initial complaint by Messrs Pauley and Elkington.
They had claimed that a selective capital reduction, under which Kaefer GmbH would have effectively bought out the minority shareholders in Kaefer Technologies, and the appointment of administrators were designed to give the German parent control of the Australian company without making a takeover bid.
The Takeovers Panel concluded that it could not identify any circumstances to support the men’s claim.