CARDNO PAYS OFF $134 MILLION IN DEBT AND SELLS SOFTWARE COMPANY

CARDNO PAYS OFF $134 MILLION IN DEBT AND SELLS SOFTWARE COMPANY

ENGINEERING consultancy Cardno (ASX: CDN) has sold its software business XP Solutions for $65 million to private equity firm EQT and has also paid off $134 million in debt, it announced today.

The move comes as the Brisbane-based company continues to restructure in challenging business conditions.

Further, Cardno is still negotiating the fallout from its disappointing purchase of Ecuador-based Caminosca in 2012.

The agreement to pay down debt from $279 million in June to $144 today comes with covenant waivers on any potential further impairment associated with the Caminosca operations and for costs associated with restructuring the company.

Cardno bought Caminosca for around $18 million in 2012, but it was forced to make a $47.6 million write-down on its Ecuador business in 2015.

It is still locked in a legal battle with Caminosca's former owners over alleged misrepresentations made in the sale process and the company has also been implicated in a scandal related to 'questionable payments' made by the Ecuador subsidiary.

Cardno was prolific in the acquisition space for years, but the global slowdown in the mining and resources sector has hurt a number of its businesses. The company has recorded two consecutive full-year losses, $245.1 million in FY15 and $176 million in FY16 largely caused by write-downs in its various businesses.

Compounding the company's troubles has been the resignation of two managing directors in the past 18 months, including Richard Wankmuller in late August.

While the company is moving to improve its position, it says challenges remain in the coming year.

"Although we are very early in the new financial year, the company expects EBITDA prior to abnormal costs, or costs associated with the restructuring of the business and Caminosca, to be of a similar order of magnitude to the reported EBITDA for continuing operations in FY16," it says in a statement today.

The company will release a further update of operational performance at its AGM on 27 October.

Cardno is trading down 0.62 per cent at $0.80 per share early this afternoon.

 

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Does your pay structure answer today's challenges?
Partner Content
If you are not reassessing how your organisation remunerates and rewards employees as a...
Aon
Advertisement

Related Stories

Seven West buys stake in fintech Raiz for $10 million

Seven West buys stake in fintech Raiz for $10 million

Australian media giant Seven West Media (ASX: SWM) will take a stra...

Shine launches class action against QSuper

Shine launches class action against QSuper

Members of QSuper have filed a class action against the super fund ...

Nic Blair's digital healthcare startup Midnight Health scores $4m investment from nib

Nic Blair's digital healthcare startup Midnight Health scores $4m investment from nib

Health insurer nib (ASX: NHF) has put its weight behind healthcare ...

Reprieve for EML Payments as Irish regulators allow new customers and programs

Reprieve for EML Payments as Irish regulators allow new customers and programs

The dreaded 'Bank of Ireland Update' has become an ominous ...