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Macmahon profits just $2m on sale

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AAP

2012-12-24

Mining contractor Macmahon Holdings expects to make just $2 million on the sale of its construction business to Leighton Holdings due to $12 million in redundancy costs.

Macmahon announced earlier in December it would sell its construction activities to become a dedicated full service mining contractor.

After recent adjustments for new work and projects, Macmahon said its deal with Leighton would be worth $20 million, and produce proceeds of $14 million after transferring employee liabilities to Leighton.

But Macmahon expects to incur $12 million in restructure and redundancy costs associated with staff that will not be transferred to Leighton.

The company has not said how many employees will lose their jobs.

"This is a significant day for the company as we refocus the business on our successful full service mining operations," chief executive Ross Carroll said in a statement on Monday.

The effective date of the sale will be December 31, but shareholder approval is still required, and a meeting is expected to be held in February.

Macmahon shares were steady at 23.5 cents at 1014 AEDT.