Buildmax to sell aggregate, quarry assets to Raumix
Opencast mining contractor and construction materials supplier Buildmax on Thursday announced that its wholly owned Buildmax Aggregates and Quarries (BAQ) business and certain of its subsidiaries had entered into an agreement to sell certain of its assets to Raubex subsidiary Raumix.
Buildmax explained that its board had decided that the aggregate and quarry operations of BAQ were noncore to Buildmax’s main contracting business, and that the offer received from Raumix represented realistic fair market value, taking into account the current operating environment.
In terms of the transaction, Raumix would pay an aggregate purchase price of R54.76-million, as well as the value of the stock, including stockpiles, spare parts and fuel, held by BAQ at the effective date of the transaction, which would be September 1.
Buildmax would use the proceeds of the transaction to improve the overall liquidity of the group, as well as to fund working capital requirements in light of the current tight funding environment.
Meanwhile, Buildmax on Thursday also announced that, owing to impairments to the intangible assets and goodwill of BAQ, in addition to the continuing poor trading conditions, it expected to report a loss and headline loss a share for the interim period to end August 30.
The company noted that, in response to the continuing poor demand for coal, driven largely by current low commodity prices, management had implemented several restructuring and cost saving initiatives which had negatively impacted the profitability of the company in the first six months of the financial year, but which were expected to derive significant savings in future.
Consequently, Buildmax expected losses per share to be between 48.5c and 58c, while headline losses a share were expected to be between 24.2c and 29c.
The company would release its interim financial results at the end of November.
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