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Macmahon poised for capital raising

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AAP

2012-12-10

Mining contractor Macmahon Holdings is poised for a capital raising as it battles to reverse a drop in earnings and tries to cut costs.

Macmahon's shares were placed in a trading halt on Monday, with the company saying an announcement was pending about a possible equity raising and strategy update.

The stock is expected to remain in a trading halt until Wednesday, or when the company makes its announcement.

Macmahon has been undertaking a major review of its costs and is axing up to 50 jobs.

In September, Macmahon said cost overruns at its Hope Downs 4 rail project in Western Australia as well as the expectation of fewer contract wins, meant its profit for 2012/13 would be about half that of the previous year.

Macmahon's shares closed at 26.5 cents last Friday.