Australian civil construction and mining company NRW Holdings (ASX:NWH)
has advised that Boggabri Coal Operations (BCO) has exercised an option to acquire the majority of the major mining equipment of Golding Contractors, a wholly owned subsidiary of NRW. Boggabri Coal Mine is an open-cut coal operation that supports a workforce of about 600 employees and contractors.
The agreement will see the sale of 38 major mobile mining assets from Golding to BCO with a target completion date of the end of July 2021. Golding will continue to perform maintenance services on site across these and around another 50 pieces of major mining equipment, engaging a workforce of over 150 personnel on site.
BCO’s exercise of the option will reduce group pre-tax earnings by circa $1.8 million per annum. The equipment will be sold for around $81 million, of which around $64 million will pay down asset financing debt.
NRW’s CEO and Managing Director, Jules Pemberton, said: "The option for Boggabri Coal Operations to acquire all or part of the associated Mining fleet was identified at the time of the acquisition of BGC Contracting. This transaction will reduce debt and increase return on capital employed. We look forward to continuing to support BCO to ensure we are best placed to continue to provide our services beyond the current contract completion date of December 2022."
Shares in NRW (ASX:NWH)
are trading 11 per cent higher at $1.72.