WBHO says Probuild sale is over

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WBHO says Probuild sale is over

Published Date: 2021-01-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

WBHO says Probuild sale is over

Buyers of the business withdrew their investment application on advice that it would be rejected by the Federal Government of Australia.

Wilson Bayly Holmes-Ovcon's shares fell yesterday after it said the sale of Probuild in Australia had fallen through. The buyers of the building construction business withdrew their investment application following advice that it would be rejected by the Federal Government on national security grounds.

The failed sale is a blow to WBHO, which reported losses in Australia last year and planned to scale down its business there as the increased size and complexity of projects presented a growing risk to its SA balance sheet. It also followed significant time, investment and ongoing commitment from both itself and the potential acquirer in progressing the deal. Due diligence was completed and commercial terms were otherwise materially agreed between the parties.

WBHO bought into Probuild in 2000 and has grown it into one of Australia's largest contractors. The company works across the commercial, educational, industrial, residential, retail, entertainment and sports and leisure sectors. Last June, it said it had been approached by a major international construction and civil services company interested in buying its 88% stake in the company. The unsolicited, indicative, non-binding and conditional proposal for Probuild was amongst a number of approaches made for the company, which also included possible strategic alliances and partnerships.

The group reported an operating loss of R541 million for the year to end-June from a profit of R561 million the previous year. While Its operations in South Africa and Africa remained profitable at an operating level, and its UK business grew operating profit, Australia's operating loss more than tripled to R1.2 billion rand. It encountered a number of delays and cost increases at its Western Roads Upgrade (WRU) project in Melbourne. Probuild's 443 Queens Street building contract also met obstacles.

After falling as much as 4.6%, WBHO's shares retraced some of their losses to close 1.9% down at R82.75.





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