CHAIRMAN Frank Tomasi has taken advantage of a run-up in Southern Cross Electrical Engineering’s share price on the back of a lucrative oil and gas contract and acquisitions.
CHAIRMAN Frank Tomasi has taken advantage of a run-up in Southern Cross Electrical Engineering’s share price on the back of a lucrative oil and gas contract and acquisitions.
Last week, Mr Tomasi pocketed more than $1.13 million from the sale of 714,844 shares at $1.59 each on-market, reducing his stake to 61.2 million shares.
However, the sale does not affect Mr Tomasi’s control of the company, with his shareholding dipping from about 51.2 per cent to 50.6 per cent.
The transaction caps off a stellar price run for Southern Cross for calendar 2009, with its share price nearly quadrupling from a base of 44 cents.
During the year Southern Cross, which provides electrical services to resources companies all over the world, announced it would re-enter the oil and gas sector after focusing on the mining industry throughout the resources boom.
The strategy, which the company has worked on for the past 18 months, crystallised last month when Woodside Petroleum awarded a $35 million contract for electrical and instrumentation work at its $12 billion Pluto liquefied natural gas project.
Work on the contract will start at the end of the year with completion expected in July next year.
The contract follows on from two acquisitions Southern Cross made in quick succession in the middle of the year.
In June, the company enhanced its offerings to the oil and gas sector with the acquisition of private company FMC Corporation, which operates Hindle Offshore Services and Hindle Electrics, for up to $5.1 million.
Hindle primarily provides electrical maintenance and inspection services to offshore exploration drilling rigs.
Less than two months later, Southern Cross bought the overhead power line business from private company KJ Johnson & Co for $9.6 million, an acquisition representing earnings before interest and tax of 2.2 times.
The acquisition was funded out of existing cash reserves.
Last month, Southern Cross won two awards at this year’s National Electrical and Communications Association Excellence Awards.
The ‘industrial project excellence’ and ‘occupational health and safety’ awards were for Southern Cross’ electrical and installation work for the upgrade of Rio Tinto’s 80 million tonnes per annum Cape Lambert iron ore project.
The company has also been awarded the ‘safety contractor of the month’ by Rio Tinto six out of 10 times.
Southern Cross has been working on the project for the past two years after it was awarded the $50 million contract at the end of 2007.
