Emeco Holdings has sold its earthmoving equipment rental business in Victoria, Australia, for about AU$12 million. The sale includes a portion of the business’ earthmoving fleet, all consumables, spare parts inventories, existing rental contracts and all employees.
Emeco struggled in 2009 and 2010 because of a downturn in the mining sector, its core market, posting a AU$49.3 million (about U.S. $48.1 million) net loss for the period, compared with a $13.3 million net profit for the previous financial year.
Emeco has closed down its U.S. and European earthmoving rental businesses, although it is continuing its operations in Alberta, Canada, and Indonesia.
"This marks another positive step forward in our strategy to release capital from underperforming businesses and to refocus on core mining markets,” said chief executive Keith Gordon. “Importantly, this sale has also enabled us to deliver continuity of employment to the employees of the Victorian civil rental business. We have now exited our businesses in the USA, Europe and Victoria where we could not see a path to acceptable returns on our invested capital. While there is still further work required to release $60 million from the disposal of non-core assets from the Victorian Rental, Australian Sales and Australian Parts businesses, we are satisfied with the progress on our strategy to date.”
Emeco officials said the sale gave its balance sheet greater flexibility and positioned the company to capture profitable growth opportunities in the future.
With North American headquarters in Alberta, Emeco Holdings is No. 58 on the RER 100.