As expected engineering and mining services company Bradken (BKN) has tumbled to a bottomline loss for 2014-15 because of heavy writedowns thanks to an ever slowing resources sector.
The company yesterday reported a loss for the year of $241 million, against a profit (much reduced) of $21.5 million in 2013-14.
As a result, shareholders will miss out on a final dividend as the company prepared to decide on whether it will be bought by a possible suitor.
Bradken said sales revenue dropped 15% to $965.9 million.
Underlying earnings before interest, tax, depreciation and amortisation dropped 21% to $136.1 million.
The heavy operating and restructuring costs pushed the bottomline result down to a loss of $241 million.
CEO Brian Hodges, who is preparing to step down after 18 years in the role, said it was too difficult in such a “challenging” market environment to make a forecast about the current financial year.
BKN 1Y – Bradken facing "challenging" environment
On the merger talks with Chilean group, Sigdo Koppers, Mr Hodges said there had been no financial proposal provided by the consortium at this stage. The company has just 18 days left of an exclusivity period in which it is trying to hammer out a merger with the Chilean industrial group, backed by private equity firm CHAMP.
Mr Hodges told Fairfax Media there had been no financial proposal provided by the consortium at this point, but both groups believed there was a “mutual benefit” to both sets of shareholders from a merger, compared with the situation if they both continued as separate firms.
Sigdo Koppers joined up with local buyout investor, to inject $70 million into Bradken to strengthen its weak balance sheet. A 60-day period for negotiations on a merger with Sigdo Koppers started in late June as part of that deal. The deadline for a merger deal expires on August 29.
Bradken had earlier rejected a $2.50 buyout offer from private equity firm Pacific Equity Partners, which partnered with Koch Industries of the US. In August, 2014, PEP and a different partner, Bain Capital, offered $6 a share for Bradken, before reducing the offer and eventually walking away.
Bradken shares ended up 1.3% at $1.125 yesterday.
