Another white knight has emerged in the Probuild collapse saga with its Western Australian infrastructure operations being taken over in a $15.2-million rescue deal.
WA-based construction and mining services group SRG Global announced plans to acquire WBHO Infrastructure’s local operations following negotiations with administrator Deloitte.
It comes after last week’s in-principle agreement entered into by Sydney-based Roberts Co to run the rule over and potentially buy a swag of Probuild’s Melbourne projects.
The sale secures the ongoing employment of 275-strong management, engineering and operational team in WA and the continued operation of WBHO Infrastructure under new ownership.
In a statement, the Perth-based listed SRG Global said the acquisition was “fully asset backed, and funded through existing cash and equipment finance facilities”.
“The acquisition will be complementary to SRG Global’s existing operations, expanding its asset management, civil maintenance and construction capabilities,” it said.
“WBHO Infrastructure in WA delivers services to several core clients common to SRG Global … [and] have a long and successful history of working together on several joint venture projects.”
Most recently, the two companies jointly undertook the $41.6-million Wanneroo and Ocean Reef roads interchange project to alleviate congestion at one of Perth’s busiest intersections in its northern suburbs.
SRG Global managing director David Macgeorge added: “We are pleased to make this announcement today which will ensure minimal disruption to the WBHO Infrastructure WA business, people and clients.”
“Importantly, our agreement underpins the ongoing employment of the WBHO Infrastructure’s Western Australian workforce at all levels, providing certainty in an otherwise uncertain time.”
WBHO Infrastructure’s WA operations historically generated circa $150 million of revenue per annum, including annuity/recurring earnings through long-term contracts with blue-chip clients.
“We are pleased to achieve this sale in a timely manner, and we are grateful for the support we have received from key stakeholders including employees, clients, sub-contractors and suppliers,” Deloitte’s WA leader Matt Donelly said.
Meanwhile, due diligence by Roberts Co is continuing in Victoria with employment for the relevant Probuild construction employees, as well as current construction supplier contracts, also part of the potential transaction.
Administrators were appointed to Probuild late last month after its South African parent company Wilson Bayly Holmes-Ovcon (WBHO) turned off the financial life support to its beleaguered Australian arm.
WBHO had propped up Probuild with substantial parent guarantee support that peaked at $178 million in October last year but “the risk versus reward became untenable” as it sustained mounting losses—mostly from 443 Queen Street and Melbourne’s Western Roads Upgrade project.
SRG Global was recently awarded three mining services in WA, New South Wales and Queensland valued at about $60 million.
It also has a $150-million five-year contract to supply specialist drill and blast services across multiple mine locations at SIMEC Mining’s iron ore operations in South Australia.
Additionally, it is working through a $20-million contract to supply and install specialist engineered curtain wall facades at the renewable energy-powered Festival Square development in Adelaide.
