GE's Aussie mining potential

AS GENERAL Electric's $470 million takeover bid of Australian equipment manufacturer Industrea develops, the global power conglomerate appears to be embracing extensive operational networks in the country's coal-rich state of Queensland.
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Industrea CEO Robin Levison with an IME LMD50 longwall mine dozer.

Lou Caruana

In preparing to offload its mining services division, Industrea has pointed to the strength of the division’s existing contracts in Queensland as a major selling point.

The separate sale of Industrea Mining Services is permitted as part of GE's friendly takeover bid.

Industrea managing director Robin Levison said: “The IMS business represents a strong growth platform with the benefit of substantial capital investment over the last 12 months resulting in both the renewal of existing contracts … along with the recent return to normal operations at [Cockatoo Coal’s Queensland] Baralaba site”

Under the scheme implementation agreement with GE, if IMS is sold, shareholders are entitled to receive the net proceeds of any sale of IMS above an agreed value in addition to the $1.27 per share offered by GE.

If IMS is not sold then GE will retain IMS as part of the proposal and shareholders will receive $1.27 per share.

IMS reported a strong first half performance for the six months to December 2011 with revenue increasing to $104.8 million compared to $80.5 million for the previous corresponding period and EBITA for that period lifting to $19.5 million from $17.4 million.

In its trading update released earlier this month Industrea reported organic growth had continued in the current half.

“All key contracts have been extended during the period and new equipment that has been deployed is contributing to the increased earnings and revenues,” it said.

IMS’ core activities are mine planning, project supervision, heavy mining equipment hire, trained equipment operator hire, overburden, coal and ore body mining and transportation, and drill and blast planning and activity.