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Leighton may sell services, property and transport businesses

Staff writer |
Leighton Holdings said it may sell its John Holland roads and rail business as Spanish-controlled majority owner Hochtief AG seeks to cut debt.

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Germany-based Hochtief, controlled by Spain's ACS Actividades de Construccion y Servicios SA, has been building its stake in Leighton since first buying a majority holding in 2001. In March, Hochtief offered to up its stake to 75 percent, raising concerns about the effect that would have on ACS's debt levels.

Selling John Holland as well as the property and services businesses would cut debt as Hochtief, which currently has 69.62 percent of Leighton, prepares to buy 75 percent and potentially move to full ownership.

In a statement to the Australian Securities Exchange, Leighton's new executive chairman and chief executive officer Marcelino Fernandez Verdes said the company would simplify its operating model to focus on its mining, construction, public-private partnerships and engineering businesses.

It would consider options for its 42-year-old property business, its services business and John Holland, "including the potential divestment or introduction of new partners to these businesses".

Sale proceeds would be "used to reduce our gearing and strengthen our balance sheet so as to increase our competitiveness", said Mr. Verdes.

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