Construction and mining services group Watpac (ASX: WTP) announced a statutory loss of $1.4 million during 1H18, however it hasn't deterred BESIX Group from testing the waters of a takeover.
Watpac announced on Monday that it had entered into a scheme implementation agreement with major shareholder BESIX Group SA, a private Belgian company, under which BESIX may acquire a further 50 per cent of WTP shares at $0.92cps.
BESIX is currently the largest Watpac shareholder holding 28.1 per cent of the voting power, however if the proposal is successful this margin will increase - representing 64.1 per cent of Watpac's total share capital.
BESIX's proposal values Watpac at $168.7 million on an equity value basis.
On its half year financial performance, Watpac managing director Martin Monro says the group's selective tendering practices in targeted sectors resulted in an improved workbook quality anticipated to result in enhanced earning prospects.
"Our construction business has continued to perform profitably over the past six months however this has been impacted by a reduction in the financial contribution of the group's Civil & Mining business," says Monro.
The group attributes the loss to lower work volumes in the mining business, offsetting a solid financial performance from the group's construction business, which recorded a 2.56 per cent increase in revenue for the reporting period.
Monro says the reduction in the financial contribution of its civil and mining business was disappointing and also reflective of the lower levels of work completed during the first half, as several large projects neared or reached completion.
"While there is low work-in-hand for the mining component of our business, pleasingly our civil infrastructure opportunities continue to grow and we anticipate this to continue into future periods," says Monro.
Shares in Watpac Limited are up 13.43 per cent to $0.76 per share at 11.56am AEDT.
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