Leighton may sell-off John Holland
Ownership of construction company John Holland may change hands under a shake-up of Leighton Holdings because the businesses will no longer be operating in the same fields.
Leighton executive chairman Marcelino Fernandez Verdes yesterday singled out John Holland for potential sale as part of efforts to slash debt and eradicate duplication at the contracting giant.
Another option is for other investors to buy into John Holland. Leighton will be considering the same alternatives for services and property businesses within its subsidiaries.
"We want to explore everything to make the right decision," Mr Fernandez Verdes said.
John Holland has been involved in some of WA's biggest construction projects. Advisory board chairman Janet Holmes a Court owned the company in the 1990s before selling to Leighton.
Mr Fernandez Verdes said Leighton's 20 per cent stake in mining contractor Macmahon Holdings was part of the ongoing strategic review.
Leighton's new Spanish management has decided to make Leighton Contractors its sole construction business, while Thiess would focus on mining.
It also plans to create new businesses to carry out engineering work and public private partnership projects, respectively.
"We see numerous construction and investment opportunities in the large and expanding PPP markets in Australia and overseas," Mr Fernandez Verdes said.
The changes are expected to take place by the end of the year.
Leighton's 70 per cent owner Hochtief took over the Australian company's management in March with a view to streamlining its myriad businesses, slashing costs and increasing profitability. Hochtief is controlled by Spain's ACS Group.
Mr Fernandez Verdes signalled that Leighton would be taking a harder line on client payments.
In its calendar 2013 accounts, the company recorded $5.1 billion in outstanding receivables.
"Our clients should consider that we are not a financial institution," he said. "We need to be paid in the way that is in the contract and not in a different way."
Mr Fernandez Verdes became chairman of Leighton this week after independent chairman Bob Humphris retired. "This is not a position I would want to keep for too long," he said.
If possible, he would prefer Leighton to have an independent chairman, he said.
