Cimic completes plan to exit Middle East with sale of stake in BIC Contracting

Australian builder Cimic Group today said it had signed a share purchase agreement with SALD Investment LLC for the sale of Cimic’s 45% stake in Dubai-headquartered BIC Contracting (BICC) – formerly Habtoor Leighton Group – marking the end of its presence in the Middle East.

SALD, a privately owned, UAE-based investment company, will purchase Cimic’s holding in BICC for "nominal consideration", Cimic said.

SALD is also acquiring the remaining 55% of BICC held by Cimic’s co-shareholder for a nominal amount.

BICC carries out building and infrastructure work in the UAE, Qatar, Oman and Saudi Arabia.

Cimic announced its plan to sell its stake in BICC in January last year, citing "the context of an accelerated deterioration of local market conditions". 

At the time, ratings agency Moody’s said BICC had produced consistent losses over 2015-17 while, in the previous six years, Cimic had been supporting BICC with substantial shareholder loans and financial guarantees.

The completion of the share purchase agreement is subject to satisfaction of certain conditions precedent and obtaining all necessary approvals.

Cimic said it agreed with SALD to contribute "a certain amount of funds" into BICC, but that the transaction does not increase its financial exposure to the Middle East.

The financial impact of the transaction to Cimic is already included in the one-off post-tax impact to Cimic’s 2019 financial statements announced on 23 January 2020.

Image: In September 2018 BICC announced it had won a contract to construct Stage 1 infrastructure works for the Aljada Development Project in the Emirate of Sharjah (Image from BICC’s media centre)

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