MacMahon challenged over Leighton sale
SHARES in MacMahon Holdings face pressure as the mining services company copes with a legal challenge over the sale of its construction business to Leighton.
An Indian-based firm, Sembawang Australia - a subsidiary of the engineering group Punj Lloyd - has instructed its lawyers to file a suit against MacMahon after being denied access to conduct due diligence on the Australian company.
Last week it emerged Sembawang Australia had made an offer to buy MacMahon's construction operations for $25 million, but MacMahon has said it could not provide access to its books without the permission of Leighton.
Leighton and MacMahon signed off on an asset purchase agreement in December. MacMahon is looking to divest its construction business and become a dedicated full-service mining contractor.
Sembawang's chief executive, Richard Grosvenor, said his company approached MacMahon on November 26 about joint ventures and the potential purchase of its construction business.
But MacMahon has denied the claim, saying the only offer it had received from Sembawang was its unsolicited, non-binding proposal received on January 3.
MacMahon is continuing preparations for an extraordinary general meeting in February, at which shareholders will vote on the deal with Leighton.
The announcement of an earnings downgrade in December came after MacMahon warned investors in September that its annual profit would be about half the $56.1 million of the previous year.