CARDNO PAYS OFF $134 MILLION IN DEBT AND SELLS SOFTWARE COMPANY

Written on the 19 September 2016 by James Perkins

CARDNO PAYS OFF $134 MILLION IN DEBT AND SELLS SOFTWARE COMPANY

ENGINEERING consultancy Cardno (ASX: CDN) has sold its software business XP Solutions for $65 million to private equity firm EQT and has also paid off $134 million in debt, it announced today.

The move comes as the Brisbane-based company continues to restructure in challenging business conditions.

Further, Cardno is still negotiating the fallout from its disappointing purchase of Ecuador-based Caminosca in 2012.

The agreement to pay down debt from $279 million in June to $144 today comes with covenant waivers on any potential further impairment associated with the Caminosca operations and for costs associated with restructuring the company.

Cardno bought Caminosca for around $18 million in 2012, but it was forced to make a $47.6 million write-down on its Ecuador business in 2015.

It is still locked in a legal battle with Caminosca's former owners over alleged misrepresentations made in the sale process and the company has also been implicated in a scandal related to 'questionable payments' made by the Ecuador subsidiary.

Cardno was prolific in the acquisition space for years, but the global slowdown in the mining and resources sector has hurt a number of its businesses. The company has recorded two consecutive full-year losses, $245.1 million in FY15 and $176 million in FY16 largely caused by write-downs in its various businesses.

Compounding the company's troubles has been the resignation of two managing directors in the past 18 months, including Richard Wankmuller in late August.

While the company is moving to improve its position, it says challenges remain in the coming year.

"Although we are very early in the new financial year, the company expects EBITDA prior to abnormal costs, or costs associated with the restructuring of the business and Caminosca, to be of a similar order of magnitude to the reported EBITDA for continuing operations in FY16," it says in a statement today.

The company will release a further update of operational performance at its AGM on 27 October.

Cardno is trading down 0.62 per cent at $0.80 per share early this afternoon.

 


Author: James Perkins Connect via: Twitter LinkedIn

Latest News

BABY STEPS FOR BELLAMY'S IN TURNAROUND

GREEN shoots are appearing in the Bellamy's Organic (ASX: BAL) business in the early days of its turnaround.

T...

LOSSES MOUNT AT SLATER AND GORDON

SLATER and Gordon's losses continue to mount following its disastrous entry in to the UK market. The compa...

NVC PLAYS A DIFFERENT GAME, AND WINS

AS its profits rise, National Veterinary Care's (ASX: NVL) focus on training over retail is proving to be a wi...

SUPERLOOP $2M LOSS DOES LITTLE TO KILL SLATTERY'S CONFIDENCE

BEVAN Slattery (pictured) is optimistic that Superloop's (ASX: SLC) financial position is promising, despite t...

Related News

HOW TO TAKE CONTROL OF YOUR CAREER THROUGH TRAINING

GIG economy, remote working, and freelance Friday are more than just buzz terms; our workforce is changing, and so...

EVERYTHING YOU NEED TO KNOW ABOUT THE NATIONAL BROADBAND NETWORK

THE National Broadband Network (NBN) is more than an internet connection, it is an opportunity to transform your b...

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter