Leighton takes over bankrupt miners

MELBOURNE - Australia's largest contractor and project developer, Leighton Holdings, yesterday agreed to buy the Australian and New Zealand contract mining business of the Henry Walker Eltin Group for A$215 million ($235 million).

The takeover came as Leighton, 53 per cent owned by German construction group Hochtief, said its first-quarter operating profit rose 32 per cent and forecast "solid" profit growth for the year.

Analysts said the outlook was consistent with the group's previous forecast of profit growth of at least 10 per cent in the year to June 2006, up from A$205.4 million last year.

Henry Walker Eltin was Australia's top iron ore contract miner when it went into voluntary administration, a form of bankruptcy, last January.

The assets that Leighton expects to take over in December include 15 mining operations with a combined turnover of about A$650 million a year, work in hand of about A$1.6 billion and a workforce of 1600.

"It's strategically positive for Leighton," said Macquarie Research analyst John Purtell, calling the A$215 million price-tag reasonable.

Leighton shares rose 1.1 per cent to $A15.08, outpacing a 0.4 per cent rise in the broader market.

One of Henry Walker Eltin's main clients is the world's biggest miner, BHP Billiton, which has plans to expand its Western Australian iron ore capacity by about 40 per cent to 152 million tonnes a year over the next five years.

Leighton said its first-quarter operating profit was $A50.6 million and its work-in-hand stood at $A15 billion at the end of September.

- REUTERS