Melbourne-based explosives manufacturer Orica Ltd. completed the sale of its Minova business to the Aurelius Group, a European-based investment firm, for A$180 million (approximately US$130.9 million at current exchange rates) on Feb. 28.
The company said it received A$149 million cash at completion, after allowing for debt and debt-like items, adding that any potential adjustments for working capital and debt-like items will be determined based on the final completion accounts.
The expected profit on disposal, as well as release of the foreign currency translation reserve, will be presented as an individually significant item in Orica’s first-half FY2022 results.
Orica and the Aurelius Group announced the agreement to sell Minova, which delivers ground support solutions for the mining, civil/tunneling, geotechnical, and construction industries, to Aurelius in December (GM Dec. 17, 2021). Orica had revealed its intention to pursue a sale of the Minova business last May (GM May 21, 2021).
Orica Managing Director and CEO Sanjeev Gandhi said the sale of Minova “is consistent with our refreshed strategy, which identified the subsidiary as non-core to Orica.” The divestment will allow the company “to focus on its four key business verticals of growth – mining, quarry and construction, digital, and mining chemicals.”
Orica said it continues to expect its first-half performance in the 2022 financial year, which runs to Sept. 30, to be stronger than the prior-year corresponding period (GM Nov. 12, 2021).
The company cited the positive momentum leading into the year associated with improved global commodity markets, which, it said, will result in volume growth in line with global GDP growth. It said pricing in contract negotiations is expected to broadly mitigate rising input costs and pass-through lags.
It noted security of supply for its customers remains a priority in a tightening global ammonium nitrate (AN) market due to geopolitical issues and supply chain disruptions, which it said will result in increased trade working capital.
Orica reported all of its continuous manufacturing plants have been operating to required available capacity as determined by market demand. Two planned turnarounds have been completed in the first fiscal half to date.
The turnaround of the AN Carseland site, 40 km south-east of Calgary, Canada, which started in September 2021 was completed in October. The Yarwun, Queensland, turnarounds for two nitric acid plants, one AN plant, and the emulsion manufacturing plant were all completed in November 2021.
The company said the outlook for its financial year 2022 remains unchanged, subject to market conditions.