One of Australia’s largest construction companies has extracted itself from its troubled operations in the Middle East.
In a statement, CIMIC Group says it has signed a share purchase agreement to offload its 45 percent investment in its Middle East based BIC Contracting to privately owned UAE-based investment company SALD.
CIMIC will not make any money from the sale and has agreed to inject an unspecified sum into the joint venture.
Whilst the sum being injected has not been disclosed, CIMIC says the transaction will not increase its previously announced financial exposure to the Middle East after it took a $1.8 billion write-down on BICC a year ago and acknowledged that it would not recover money owed on projects constructed during the Dubai property bubble in the late 1990s and early 2000s.
Furthermore, the sale accounts for all the group’s Middle Eastern operations, meaning it is now free of its troubled operations in the region.
There have been concerns about an emerging humanitarian crisis amid reports by The Australian that hundreds of workers who worked on projects for BICC’s Qatar Joint Venture Leighton Contracting Qatar have been unpaid for months.
Many of these workers are immigrants and have been unable to leave the country.
According to The Australian, Leighton Contracting Qatar has been slapped with more than 350 legal claims demanding payment of unpaid debts worth more than $US 1 billion.
Last week, CIMIC reported a 14.2 percent drop in underlying net profit after tax as a COVID impacted year saw its revenue slashed by more than two billion Australian dollars.