Macmahon Holdings

A$194m acquisition of mobile mining equipment from AMNT, in exchange for a 44% strategic shareholding in Macmahon

August 2017

In May 2017, it was announced that Macmahon Holdings Limited (“Macmahon”) entered into a binding transaction with PT Amman Mineral Nusa Tenggara (“AMNT”). The AMNT transaction consisted of:

  • Macmahon becoming the life-of-mine mining services contractor for AMNT’s Batu Hijau copper-gold mine in Indonesia, which is expected to generate revenue of US$2.9 billion over the life of the Batu Hijau operation;
  • Macmahon acquiring mobile mining equipment from AMNT independently valued at US$145.6 million;
  • The issue of approximately 954 million Macmahon shares to AMC (a subsidiary of AMNT) at a subscription price of A$0.203 per Macmahon share, as consideration for the acquisition of AMNT’s existing mobile mining equipment (subject to a 30-month escrow period) to be initially held by an Australian custodian to facilitate a buy-back mechanism;
  • Buy-back mechanism allowing Macmahon to call for a buy-back of the shares held in escrow if the mining contract is cancelled for any reason during the first 30 months of operations; and
  • Strategic alliance agreement between Macmahon and AMNT.

Announcement of the AMNT transaction followed a hostile takeover offer from CIMIC Group Limited (“CIMIC”) that closed in March 2017, and CIMIC’s eventual exit from the Macmahon share register in July 2017.

The AMNT transaction completed in August 2017.

Azure advised Macmahon on all aspects of the transaction including valuation and strategic advice, defence tactics, structuring, coordination of due diligence and negotiation of the relevant transaction agreements.