Fulton Hogan cleared to buy back shares, asphalt maker

Civil contracting company Fulton Hogan has shareholder approval to buy back Shell's 37 per cent shareholding in the company and is also buying 50 per cent of an Australian asphalt manufacturer from Shell Australia.

Fulton Hogan is buying half of Pioneer Road Services. It bought a half-share of the Melbourne-based company in May this year from Hanson Australia. The purchase of the rest of the company from Shell Australia by the end of the year will be funded by debt.

Fulton Hogan has operated in Australia since 1980 and its business there now turns over A$800 million ($1 billion). Pioneer Road Services has revenue of about A$400 million a year and has about 800 staff.

The size of the Australian acquisition was the reason why the buyback of Fulton Hogan shares from Shell was over a period of time, Fulton Hogan managing director Dave Faulkner said.

"We are in an unusual position in that we have come from a position of pretty low debt, unlike others at the moment," he said. The low debt resulted from selling EnviroWaste Services in 2006.

Fulton Hogan is a privately owned company that has recently commemorated 75 years in business. The company moved to Christchurch in 2001 after 68 years in Dunedin.

Faulkner said Fulton Hogan was still a South Island company and it intended to be so for a long time.

The buyback of shares will start on December 30 this year and take 4 years. Fulton Hogan will cancel the shares as they are purchased.

"Fulton Hogan is a well-run, New Zealand-owned business that we have enjoyed a very successful business partnership with for nearly 30 years," said Rob Jager of Shell New Zealand.

"Fulton Hogan indicated to us a strong desire to preserve the fabric of the company and keep the ownership within the founding family shareholders, employees and business partners, without introducing a new shareholder at this time.

"We have worked constructively with the company to find a solution meeting these requirements."

Shell is continuing exclusive discussions with Infratil and New Zealand Superannuation for the potential sale of the New Zealand downstream business. Shell has decided to simplify its downstream portfolio and concentrate on larger, integrated assets in growth markets.

- NZPA