Oct. 23 (Bloomberg) -- Basil Read Holdings Ltd., a South African construction company, climbed the most in more than seven years after saying it sold the TWP Holdings mining and services business to a unit of Australia’s WorleyParsons Ltd.
Basil Read surged 18 percent, the most since July 2005, to 10 rand at the close in Johannesburg.
WorleyParsons RSA Group Pty Ltd. will pay Basil Read 900 million rand ($102 million) in cash for TWP. The deal excludes a number of TWP divisions, including Basil Read Matomo Projects Pty Ltd., which was formed after Basil Read bought TWP three years ago, the Boksburg-based company said in a statement today.
Proceeds will be used reduce debt, fund growth and position the company “for the planned local-infrastructure roll-out which we believe will build momentum during 2013,” Chief Executive Officer Marius Heyns said in the statement. “We will be able to concentrate on our core business with increased emphasis on our special projects.”
Basil Read’s 30-day historical volatility, a measure of stock swings, jumped to 54.31 from 24.41 the previous trading day. The FTSE/JSE Africa All Share Index’s 30-day volatility measure was at 12.5 versus 12.23 previously. A higher reading means the price of an asset can move dramatically in a short period. About 2 million Basil Read shares traded, more than nine times the daily average in the past three months.
“The transaction creates value for our shareholders and fits perfectly into our evolving strategy of increased focus” on engineering, procurement and construction, Heyns said.
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