Sembawang Engineers and Constructors Pte Ltd (Sembawang), a Singapore-based subsidiary of construction firm Punj Lloyd Ltd, has made an offer to ASX-listed Macmahon Holdings Ltd for buying its construction business. This comes as a counteroffer to the proposed takeover of the asset by Leighton Holdings Ltd, a large minority shareholder of the Australian stock exchange-listed contract mining and construction company, Macmahon.
Leighton had offered to buy the assets for A$20 million ($21 million) last month. Sembawang’s Australian arm has offered A$5 million to the Australian firm, translating into an offer worth A$25 million or $26.2 million.
Richard Grosvenor, president and CEO of Sembawang, said on the proposed bid, “Sembawang has always been eyeing Macmahon’s construction business for over four years now and believe that the time is right to make this offer given the fit in strategies for both companies, that is in respect of Macmahon wishing to exit construction in Australia and Sembawang wishing to enter, our wavebreak project on the Gold Coast Broadwater being testimony to this.”
Sembawang has presence in Malaysia, Indonesia, HongKong, China, India, UAE, Bahrain and Australia. Some of the projects it has concluded include Singapore’s Marina Bay Sands and Resorts World Sentosa integrated casino resorts and Jumeirah island villas in Dubai.
Punj Lloyd Ltd is an infrastructure firm providing engineering, procurement, and construction services with around $2 billion in annual revenues but thin margins. The firm counts amongst its investors Warburg, which held 4.46 per cent stake in the firm as of September 30.
Once a stock market darling, the Delhi-based firm has been battling cost overruns and heavy debt on its books, which has affected its margins.
(Edited by Prem Udayabhanu)