This article is from the Australian Property Journal archive
UGL Limited (ASX: UGL) is considering restructuring the company following the growth of the property business, DTZ, which it acquired in December last year.
UGL chairman Trevor Rowe said the $1.2 billion property business has experienced significant growth and now represents close to 50% of the company’s earnings.
UGL is considering several options to review its existing structure which consists of the engineering, operations & maintenance business and the property division.
“The review will assess the optimal corporate structure under which UGL should operate to deliver the best outcomes for all stakeholders. Various alternatives from maintaining the current corporate structure, reviewing a potential structural separation or demerger of the Company, as well as UGL’s M&A strategy will be considered.
“Tax, debt and management issues that would be associated with a separation will also be examined as part of the Review process,” Rowe said.
CEO Richard Leupen said over the last decade, UGL’s Engineering businesses have become market leaders in engineering construction and maintenance services across key sectors in Australia, employing 8,000 people and generating annual revenue in excess of $2.5 billion.
And the property business, DTZ, operates in 52 countries, employing 47,000 people and generating annual revenue of $2.0 billion.
“Given the substantial scale both businesses have now reached, it is the right time to review UGL’s corporate structure to fully capitalise on the strong growth opportunities across the engineering and property services sectors.
“We expect to provide an update on the review by the announcement of our full year results on 12 August 2013, if not earlier. While we will aim to complete the review as quickly as possible, our priority is to ensure that all relevant matters are carefully and rigorously examined,” he continued.
Leupen cautions that there are a number of significant issues to be considered and as such, there is no assurance that the review will result in a change to the current corporate structure of UGL.
UGL has appointed Goldman Sachs to advise the company.
Property Review
