Downer to merge Australian and New Zealand infrastructure businesses

Tuesday 1st May 2012

Downer EDI plans to merge its Australian and New Zealand infrastructure businesses into one company, Downer Infrastructure.

The Australia-based engineering company said it will then have three businesses - Infrastructure, Downer Mining and Downer Rail.

Chief executive Grant Fenn said the merger will deliver a range of benefits flowing from greater collaboration including sharing of skills, knowledge and best practice.

“The establishment of Downer Infrastructure will help us optimise our performance, deliver better results for our customers and implement change more effectively,” Fenn said.

In both countries Downer Infrastructure operates in the transport, water, communications and power markets, employing about 14,000 people. It had A$8.4 billion of work in hand at Dec. 31 and contributed about half the parent company's earnings before interest and tax.

Fenn said the merger will enhance the company's ability to grow and will offer customers “a substantially enhanced asset management capability. It will also offer employees greater career opportunities, he said.

Last week, Downer announced contracts worth more than NZ$224 million with Auckland Council and its transport company for maintaining roads, parks, playgrounds and sports fields and a wide range of buildings from council offices to residential properties.

Downer has two NZX-listed debt securities. Its $150 million of senior bonds maturing in September last traded at $102.431 per $100 face value while its $200 million of subordinated perpetual preference shares, which are due to be reset in June 2012 at a 4.05 percent margin over the one-year swap rate, last traded at $79.091 per $100 face value.

BusinessDesk.co.nz

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