EGL picks up the old Tomlinson boiler business in RCR fire sale
Link copied to
The Environmental Group is picking up gear in the RCR Tomlinson fire sale, following the latter’s descent into voluntary administration in November last year.
The smaller company (ASX:EGL), which runs a gas turbine engineering company, and water and air pollution divisions, is buying RCR’s (ASX:RCR) energy assets.
Those assets include the original Tomlinson Boilers arm, which handles maintenance and installation of renewable- and conventionally-fired generators and water heaters.
RCR went into voluntary administration last year after the weight of cost blowouts at its solar projects became too heavy for the troubled company to carry any longer.
It came two days after a class action was launched by shareholders angry about a “catastrophic decline in their share value”.
The Environmental Group expects to have the assets in hand within the next week, and will pay for it out of existing debt.
RCR’s energy services made sales of $21.5m in fiscal 2018 and earnings before tax and interest of $1.5m.
The Environmental Group made sales of $32m in the same period and profit of $1.5m, down 9 per cent on the year before.
“The acquisition is part of EGL’s strategy to establish a footprint in each Australian state and build an environmental business to improve air quality, reduce carbon emissions, enhance waste to energy production and lift water quality,” the company said.
“RCR Energy Service is an essential link in our strategy to build a bio/waste-to-energy platform as part of the technology acquired enables a combination of gasses and waste energy sources to be used to produce electrical power or steam.”
The company has been contacted for comment.
The Environmental Group shares opened flat at 3.5c on Monday morning.