Big names show faith in contractor
A group of industry heavyweights has struck a $9 million deal to take a near 20 per cent stake in struggling contractor Resource Equipment.
The consortium includes Stephen Donnelley and Andrew Aitken, both former managing directors of equipment rental company National Hire, and Ostwald Bros chief executive Brendan Ostwald.
A fund managed by investor Mark Carnegie's MH Carnegie & Co is also part of the Carosti Investments consortium.
Resource Equipment will place $5.3 million in stock with Carosti at 14� a share. Providing shareholders approve, another $3.5 million in shares will be issued to the consortium, taking its stake up to 19.9 per cent.
The contractor's shares closed at 12.5� yesterday.
Mr Donnelley will be appointed to Resource Equipment's board. "We see significant opportunities in the areas that REL specialises in, have great confidence in the management team and are looking forward to facilitating business expansion and growth," he said.
Resource Equipment chief executive James Cullen said the investors had been prepared to pay above market price at a time when mining services businesses were out of favour.
