CIMIC earns $2.2bn from sale of 50 per cent stake in Thiess to Elliott Advisors

ASX engineering firm CIMIC Group (ASX:CIM) has earned $2.2bn from the sale of a 50 per cent interest in its mining contract services provider Thiess.

The transaction values Thiess — the world’s largest mining services company — at $4.3bn and the sale’s cash proceeds are more than the initial estimate of $1.7bn to $1.9bn.

“The transaction proceeds will primarily be used to strengthen our balance sheet through the reduction of debt, while also providing additional capital to pursue organic growth prospects as well as broader capital allocation opportunities,” executive chairman and chief executive, Juan Santamaria, said.

The higher sale price is due to transaction closing adjustments and the final financial position of the underlying Thiess business.

“Our retention of the remaining 50 per cent [of Thiess] reflects the ongoing strategic importance of Thiess to our business,” said Santamaria.

Elliott Advisors funds snaps up half of Thiess

CIMIC Group has sold half of its stake in Thiess to funds advised by UK-based investment fund manager Elliott Advisors.

Elliott Advisors has more than $US40bn of funds under management including equity positions in private and listed companies around the world.

Thiess provides mining services under contract to 25 projects across a range of commodities in Australia, Asia, Africa and the Americas.

The firm has annual revenue in excess of $4.1bn, owns more than 2,200 assets including plant and equipment, and employs 14,000 people.

Thiess is included in CIMIC Group’s mining and mineral processing division, alongside CIMIC company Sedgman, a minerals processing company.

As part of the deal, Elliott Advisors has the option to sell its 50 per cent interest in Thiess to CIMIC Group in three to six years, or to offer the business for sale to a third party or through an IPO.

CIMIC Group has an extensive order book for both mining and non-mining projects including the building of a fifth terminal at Singapore’s Changi Airport.