Downer offloads another business

DOWNER EDI has announced it will sell its tyre management business Otraco to Bridgestone Corporation.
Downer offloads another business Downer offloads another business Downer offloads another business Downer offloads another business Downer offloads another business

Staff reporter

The sale price represents an enterprise value of A$79 million.

Downer CEO Grant Fenn said the sale of Otraco was another important step in the company's divestment of its portfolio of mining businesses in order to focus on urban services.

"The sale of Otraco follows Downer's exit from its underground mining, Open Cut Mining West, Downer Blasting Services and Snowden consulting businesses and also our share in the RTL Mining and Earthworks joint venture," he said.

Downer's sale of mining and laundries assets to date, including Otraco, will deliver total proceeds of $605 million, of which $476 million has been received.

"We remain in active discussions with a number of interested parties in relation to the Open Cut Mining East business," Fenn said.

Completion of the Otraco deal is expected before the end of the year.

Bridgestone said the acquisition would accelerate the growth its global mining solutions business and expand its service network in key markets such as Australia, Chile and South Africa.

Otraco has 860 employees, all of which will transfer to Bridgestone.

Downer shares last traded at $5.42, valuing the company at $3.8 billion.