CSR Limited Managing Director Peter Kirby today endorsed the decision by cement manufacturing company, Australian Cement Holdings Ltd (ACH), to sell back its 49% shareholding in Adelaide Brighton Cement Ltd (ABCL) to Adelaide Brighton Ltd (ABL), for a total consideration of around $83 million.
The deal is subject to a number of conditions being met.
ACH is 50% owned by CSR Limited and 50% by Pioneer International Limited.
"The ACH stake in ABCL has not performed to expectations. Divestment will enable ACH to focus on improving the performance of its wholly-owned operations. It will also improve the shareholder value delivered by CSR’s investment in ACH," said Mr Kirby.
"Within the ABL Group, the transaction will help facilitate various operating cost reductions, together with production and other efficiencies.
"As part of the transaction, CSR has separately negotiated long term cement purchase arrangements with ACH in Western Australia, South Australia and the Northern Territory, at prices which will enable CSR’s operations in those areas to be very competitive."
The ACH media statement on the ABCL divestment is attached.
For further information, please call:
Debra Stirling on (02) 9235 8040 or 0419 476 546
30 March 1999
30 March 1999
ACH SELLS SHAREHOLDING IN ADELAIDE BRIGHTON
Australian Cement Holdings Pty Limited (ACH), announced today that it had agreed to sell its 49% shareholding in Adelaide Brighton Cement Limited (ABCL) to Adelaide Brighton Limited (ABL) for $83 million. After the sale, ABCL will be wholly owned by ABL.
ACH is owned 50% by Pioneer International Limited and 50% by CSR Limited.
The acquisition of ACH’s interest in ABCL is part of a restructuring by ABL with the Rugby Group whose subsidiary, Cockburn Cement, manufactures cement and lime in Western Australia. The transactions are subject to a number of conditions precedent, including approval by the shareholders of ABL and authorisation of the restructure by the Australian Competition and Consumer Commission.
ACH Chief Executive Norman Nolan said that ACH had indicated its willingness to sell its stake in ABCL some time ago, following an approach from ABL. Subsequently, ABL and the Rugby Group opened discussions about restructuring their respective interests and acquiring ACH’s 49% shareholding in ABCL.
"The 49% ABCL interest is worth more to ABL than to ACH because it will allow the ABL Group to achieve a number of operating efficiencies and cost benefits which are not possible under its existing structure," Mr Nolan said. "For ACH, this was an underperforming asset which has been divested for a modest book profit, so the transaction makes sense for all parties involved."
As part of the restructuring, ACH will enter into long term contracts with ABL for the supply of cement in Western Australia and South Australia for on-sale separately to Pioneer and CSR in these States.
For further information, contact Mr Norm Nolan, telephone (02) 9956 8811
AUSTRALIAN CEMENT HOLDINGS PTY. LTD.
ACN 001 085 561
REGISTERED OFFICE RAILTON TASMANIA 7305
LEVEL 3, 53 BERRY STREET NORTH SYDNEY NSW 2060 PO BOX 491 NORTH SYDNEY NSW 2059 PHONE (02) 9956 8811 FAX (02) 9956 7311