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Update on BGC Group Sale Process

28 February 2019

HIGHLIGHTS

  • Macquarie Capital considering options for BGC Contracting
  • Plans to divest core building materials and construction businesses deferred for foreseeable future
  • Search underway for CEO to implement independent executive structure for ongoing core business
  • Staged sale of non-core properties

The BGC (Australia) Pty Ltd (BGC) Board advises that it has commenced exploring options for the Group’s national contract-mining, maintenance and civil-construction business, BGC Contracting.

BGC Chairman Neil Hamilton said the process will be led by its corporate advisor, Macquarie Capital, which in conjunction with the Group’s management has commenced exploring a number of strategic options for BGC Contracting including a possible sale, divestment of parts of the business and/or alternate operating models or structures.

“While this review is ongoing it will be business as usual for our customers and our staff, and the focus of BGC Contracting will continue to be on delivering excellent services for our customers,” he said.

“BGC Contracting is one of Australia’s leading independent contractors, with a workforce of 2,000 delivering a current contract pipeline valued in excess of $1.7 billion across the country. Our workforce remains our most valuable asset and we are confident that all options being explored are strengthened by the value that our people bring to our customers.”

Core Building Materials and Construction Businesses

Mr Hamilton said that having considered the current challenging trading environment, including historically-low levels of housing starts in Western Australia, the Board had determined that market conditions are not conducive to any near-term plan to realise the value of the Group’s core building materials and construction businesses.

“We have identified a number of strategic initiatives which can be pursued in the short-term which will materially enhance the business performance and valuation. Any divestment plan for these businesses has therefore been deferred for the foreseeable future,” Mr Hamilton said.

“Importantly, BGC Group is well positioned to emerge from this cycle stronger than ever, with a strong balance sheet, pre-eminent market position and best-in-class manufacturing and operating assets.”

Mr Hamilton reiterated that BGC’s shareholders remained committed to supporting and investing in the Group’s core business, ensuring its market leading brands are well positioned beyond the current cycle.

“We are working to optimise our performance during the current market environment and to best position our businesses to benefit from the anticipated future improvement in end-markets. We have commenced a detailed strategic planning review with the objective of placing the BGC Group in an optimal position to use its vertically-integrated operating model to leverage growth and profitability upon the return of more normal operating conditions,” he said.

Executive Structure

“As we move forward in this direction, the Board, with the support of the shareholders, have made the decision that now is the right time to introduce an independent executive structure for BGC, with the appointment of a CEO to manage the ongoing operations of the Group.”

With immediate effect, Alan Tate, Group CFO will assume the role of acting CEO, with Messrs Sam and Andrew Buckeridge and Julian Ambrose relinquishing their respective day-to-day executive responsibilities.

Together with Mr Andrew Teo, they will remain as non-executive directors alongside recent Board appointees Neil Hamilton, Jenny Seabrook and Matt Bungey.

The Board has instituted a search for a CEO and will announce this appointment in due course.

Non-core Property Assets

The Board has also initiated a staged process to divest a number of non-core properties which are surplus to the needs of the Group, this process is likely to be completed over a number of years.

Considered Process

“The Board is following an orderly and strategic process to consider the various options to allow the Buckeridge family to realise their investment in the Group, and these are the next steps in that process,” Mr Hamilton said.

“This is a significant undertaking and will take time. In the interim, our focus remains on continuing to win work across the Group, and safely meeting and exceeding the expectations of our customers.”


BGC Group Signs Sales Agreement for Westin Hotel

18 February 2019

BGC has signed an agreement with Starhill Hotel (Perth) Pty Ltd and Starhill Hotel Operator (Perth) Pty Ltd, both entities under the division of YTL Hotels for the sale of The Westin Perth hotel in Western Australia.

This follows the announcement in November regarding the sale of Aloft Perth to Hiap Hoe Ltd. Like the Aloft, the Westin will continue to be successfully managed and operated by Marriott International, maintaining the same team and the same high standard of service.

BGC director Sam Buckeridge said the Board was pleased with the strong interest shown by potential buyers and the outcomes achieved in relation to both hotels, freeing up in excess of $300 million of capital for re-deployment by the BGC Group.

“We are very proud to have created two of Perth’s best hotel offerings, combining BGC Construction’s commitment to quality with Marriott’s fantastic service delivery,” Mr Buckeridge said.

The transaction is expected to complete in the first quarter of this year.

The Westin is a 368-room luxury hotel situated in the rejuvenating east end of the Perth CBD.

It features a signature restaurant in ‘Garum’ by celebrated chef Guy Grossi, a high-end spa delivered by Bodhi J Wellness and more than 1,700sqm of meeting space including an 800sqm ballroom and 340sqm of divisible function facilities.

BGC wishes to thank JLL Hotels & Hospitality Group and JLL Asset Management Services for their successful assistance in the sale.


BGC Group Signs Sales Agreement for Aloft Hotel

14 November 2018

BGC Group has signed an agreement with Singapore-based Hiap Hoe Ltd for the sale of the Aloft Hotel and 25 Rowe office complex in Perth, Western Australia for A$100m.

The agreement will see the hotel continue to be successfully managed and operated by Marriott International, maintaining the same team and the same high standard of service.

BGC Group director Sam Buckeridge said the Board was pleased with the result.

“The sale is a testament to the quality of the Aloft development completed by BGC Construction last year, and the Marriott team which continues to deliver a fantastic experience for guests,” Mr Buckeridge said.

“We are pleased to reach this agreement with Hiap Hoe, which will retain the fantastic Marriott-managed Aloft team. The sale will free up capital invested in this asset by the Group for re-deployment,” Mr Buckeridge said.

Hiap Hoe has a successful track record in both hotel and commercial property investments in Australia and currently owns the Marriott operated Four Points by Sheraton Melbourne along with commercial offices in Perth.

The transaction is expected to complete in Q1 2019, following the granting of the required FIRB, liquor licencing and board approvals.

The four-star Aloft Hotel in Rivervale opened last year and was placed on the market for sale in May this year.

The Hotel is part of a complex that includes a 10,600 square metre A-Grade commercial building and a 500-bay carpark.

Located at The Springs, Rivervale, on the banks of the Swan River, the Hotel is ideally located in close proximity to the Airport, Perth’s new Optus Stadium and road and rail links to the heart of the city.

The BGC Group’s other high-profile hotel property, the five-star Westin Perth, is also on the market, with the sales process progressing well.

“The current constrained supply of quality, contemporary hotel properties in Perth’s rising market continues and has seen strong interest for the Westin Hotel,” Mr Buckeridge said.


Independent Non-executive Directors Join BGC Group Board

12 October 2018

The BGC Group has appointed three experienced and highly credentialed independent non-executive directors to its Board.

Neil Hamilton, Jennifer Seabrook, and Matthew Bungey will commence their directorships immediately and help guide the strategic direction of the company as it embarks on the next steps of the sale process to realise the value of the privately-owned company.

The independent directors join existing directors Julian Ambrose, Andrew Teo, Sam Buckeridge and Andrew Buckeridge. The Board is expected to confirm Neil Hamilton as chair at its next meeting.

"Collectively, our new directors bring a wealth of corporate experience, including impeccable credentials in major corporate transactions and the construction, resources, manufacturing, property and finance industries," director Sam Buckeridge said.

"They bring specialist expertise to complement the existing strengths of the Board and we are delighted to have attracted such high-calibre and respected directors as we undertake the divestment process."

Accomplished chairman and director, Neil Hamilton said he was delighted to have the opportunity to work with such an iconic Western Australian company.

"The BGC Group boasts an incredibly diverse range of successful and vertically integrated companies and businesses which operate across a number of key sectors in the Australian economy," Mr Hamilton said.

"From residential and commercial building to the manufacture of construction products and the delivery of contract mining services, the Group has significant and highly valuable assets which will no doubt attract strong interest in the market."

Mr Buckeridge said the Board would continue to progress the sale process in a considered and informed way.

Independent Non-executive Director Bios

Neil Hamilton
LLB
Independent non-executive Director
BGC Group

Neil Hamilton brings a wealth and diversity of corporate experience from a career spanning more than four decades. An accomplished chairman and director, Neil has extensive experience in the legal profession and business across a range of industries including investment and funds management, insurance, banking and resources. Since May 2018, he has been Senior Adviser at Sternship Advisers, following eight years as Senior Adviser and Chair of the Western Australian office of UBS AG.

Neil has previously served as Chairman of IRESS, Challenge Bank Limited, Mount Gibson Iron Limited, Oz Minerals, LandCorp (Western Australian Land Authority) and Western Power and Director of Insurance Australia Group Limited, Adelaide Brighton, Metcash Limited, Programmed Maintenance Services Limited. He is past Chairman of West Coast Eagles Football Club and the AFL Players Association Advisory Board and a Life Member of both organisations.
Jennifer Seabrook
B.Com., FCA, FAICD
Independent non-executive Director
BGC Group

Jennifer Seabrook has worked at the highest levels of corporate Australia for more than 30 years. A former member of the Takeovers Panel, she has senior experience as a chartered accountant, investment banker and capital markets adviser. Ms Seabrook is highly experienced in mergers and acquisitions and has extensive public company board experience.

She is currently a Senior Advisor to Gresham Partners Limited and also a non-executive Director of Iluka Resources Limited, IRESS Limited, MMG Limited and the Australian Rail Track Corporation. Her previous directorships include Western Australian Treasury Corporation, Export Finance and Insurance Corporation, Amcor Limited, Bank of Western Australia Limited, West Australian Newspapers Holdings Limited, Australian Postal Corporation, Alinta Gas and Western Power.
Matthew Bungey
B.Eng. (Hon), B.Sc., MBA
Independent non-executive Director
BGC Group

Matthew Bungey is a seasoned M&A practitioner with significant experience advising the Board and management of global companies on corporate transactions, asset-level deals and complex financings. Over the past decade he has advised on many of the most significant transactions in the global Natural Resources space. He is a Managing Director of Barclays Investment Banking Division, having worked in London between 2006-2017. He has recently moved back to Australia with Barclays.

Originally from Western Australia and with a background in engineering and marketing, Matthew has worked on deals across North and South America, Asia, Africa, Europe and Australia. Matthew has an MBA with Distinction from INSEAD and studied under-graduate at the University of Melbourne.

BGC Group Appoints New Group Chief Financial Officer

12 October 2018

Experienced corporate executive Alan Tate has been appointed Group Chief Financial Officer of the BGC Group.

Director Sam Buckeridge said Mr Tate brings a wealth of experience to the Group, with a career spanning 25 years.

"We are very pleased to have Alan join the team and look forward to benefiting from his strategic, commercial, and financial leadership," Mr Buckeridge said.

"The Group has a strong pipeline of long-term work, and is well placed to benefit from improving conditions in the resources, construction and property sectors.

"Alan will play a critical role in ensuring the Group maintains its strong financial performance and achieves operating efficiencies across its diverse range of divisions."

Mr Tate has previously held senior leadership positions with a range of major corporates including CFO of Iluka Resources, EMR Golden Grove and Jabiru Metals and held senior strategic, commercial and finance roles at BHP Billiton and WMC Resources. He is a Fellow of Chartered Accountants Australia and New Zealand and a Fellow of the Australian Institute of Company Directors.

He replaces Andrew Teo, who retired from the Group CFO position in March after 35 years' service. Mr Teo remains a director of BGC.


Statement Issued by BGC (Australia) Pty Ltd in Relation to the Sale of the BGC Group

30 May 2018

The Board of BGC (Australia) Pty Ltd will undertake an orderly divestment of the Group, in order to give effect to the amendments to the Will of Len Buckeridge which have been agreed to by Len's family.

The Board will carry out the divestment in a considered, informed and methodical manner which may take a significant amount of time to finalise. There is no time pressure being placed on the completion of the divestment process. In the meantime, it is business as usual for all of BGC's operating companies and divisions.

BGC (Australia) is one of the nation's biggest and most diverse privately-owned companies with an annual turnover in excess of $2.5 billion. The Group comprises a number of companies and businesses, significant and varied capital assets and a diverse portfolio of property holdings and investments.

Our vertically integrated operations span residential and commercial building, the manufacture of building and construction products, contract mining, engineering construction, the manufacture and maintenance of structural and mechanical equipment, quarrying, road transport, property ownership and management and insurance.

Our people are at the heart of our business and through the efforts of our more than 4,300 staff and our valued contractors, the BGC brand has become synonymous with quality, integrity, innovation and value.

The Directors are committed to the continuing success of the business, in the interest of all its stakeholders, not least its people.

We have a strong pipeline of long-term work valued in excess of $2.7 billion and our priority will be to ensure that we continue to support our people to deliver quality outcomes for our clients and business partners.

We will continue to keep all of our valued stakeholders including our people, our clients and our supply partners informed as and when there are developments to report.


NAIDOC Week Summit Sponsorship

18 June 2018

The BGC Group has sponsored a student for the national NAIDOC week Girls Academy Year 12 Summit, held in Canberra.

Girls Academy is a not-for-profit charitable organisation founded in 2004 by Olympian and champion basketballer Ricky Grace, whereby it develops and empowers Aboriginal girls through leadership training, mentoring, sport and extra-curricular programs.

Here are the details for our 2018 BGC sponsored student, Peggy.