CONSTRUCTION company, Besix Group plans to acquire a major shareholding in Watpac Limited (ASX: WTP) and the two companies will pursue joint venture opportunities.
Besix has entered into an agreement to acquire the 15.6 per cent shareholding (approximately 28.8 million shares) from long-term WTP board member and major shareholder Kevin Seymour AM and other parties.
Seymour will reportedly not retain any shareholding in the company and will retire from the WTP board in September.
While the agreement remains subject to approval from the Foreign Investment Review Board, it is scheduled to settle within the next 30 days. The groups have also signed a Memorandum of Understanding to investigate future joint venture opportunities.
Besix Group was founded in Belgium in 1909 and is one of the world’s largest privately-owned construction groups, specialising in the construction of buildings, infrastructure, marine environments and sporting facilities.
Besix Group was part of the joint venture that delivered the world’s tallest tower, the 800 metre ‘Burj Kahlifa’, in Dubai in 2010. Current landmark projects include the EUR 1.5 billion Ferrari Experience theme park in Abu Dhabi, the EUR 71.4 million Carpe Diem office tower in Paris and the EUR 136 million Ras Laffan Port Expansion Project in Qatar.
In Australia, Besix Group is currently operating in the marine works sector in a joint venture with another leading national contractor to design and build a ‘construction port’ comprising a breakwater and materials unloading facility as part of the LNG terminal for Chevron at Wheatstone in Western Australia.
WTP chair Chris Freeman AM (pictured) says the transaction is a significant endorsement of the company’s capabilities and industry leadership.
“Besix Group has been actively monitoring the Australian market for several years and ultimately chose to approach Watpac,” says Freeman.
“The strategic alliance with Watpac provides Besix group with a reliable partner with sophisticated local networks, a healthy balance sheet, diversified income stream and rigorous corporate governance.
“It also provides a platform for Besix Group to expand its international operations and increase its exposure to Australia’s construction sector.”
Freeman says leaving the shareholding transaction as a legacy speaks volumes of Seymour’s enduring commitment to WTP’s success and evolution over the past 17 years.
“Mr Seymour has been a non-executive director of the Watpac board since 1996, devoting his time, expertise and leadership to growing the business,” says Freeman.
“Of his 17 years on the board, he served eight years as chairman and oversaw the fastest growth and diversification in the company’s 30 year history.”
Property asset impairments have impacted profits for WTP in the first half of FY13, but underlying performance demonstrated the strength of the group.
The company exited its non-core property assets, which had been underperforming for some time, paying down the property debt in the process and returning equity to the balance sheet.
Earlier this year the company secured a $200 million contract from Daisho to construct an a-grade quality commercial tower in the Brisbane CBD, which will give a significant boost to revenue in FY14.
Watpac reported NPAT down 74.17% to $1.26m for the half-year ended 31 December 2012. Revenues from ordinary activities were $943.9m, up 47.59% from last year.
WTP shares rose 6.57 per cent this morning to 73 cents per share.
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