Leighton Agrees to $647 Million Telecom Sale to Ontario Teachers
The sale values the whole business at A$885 million, before adjustments including ones related to its debt, tax liabilities and capital spending, the Sydney-based company said in a regulatory statement today. Leighton will retain 30 percent of the business and have 50 percent of board seats after the deal is completed around mid-year, the company said.
Leighton is selling the NextGen data network, cloud storage unit Infoplex, and data center provider Metronode to pay debt following “unsolicited” interest in the business, it said in September. Leighton paid off about 48 percent of its net debt in the six months ended December, leaving it with A$914 million, according to data compiled by Bloomberg.
“We have formed a very positive relationship during the sale process,” Hamish Tyrwhitt, chief executive officer, said in a statement. “That augurs well for the future development of these telecommunications businesses.”
Leighton’s chairman and two more of its ten non-executive directors resigned March 22, saying controlling shareholder Hochtief AG (HOT) didn’t support an independent board.
Investors will be concerned that Leighton is vulnerable to “capital stripping” by Hochtief, which is itself controlled by Spain’s ACS Actividades de Construccion y Servicios SA, National Australia Bank Ltd. head of credit research Michael Bush wrote March 22.
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