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AusGroup to buy housing space for marine workers on Australia's Melville Island for A$11.8m

AUSGROUP Ltd - a construction and marine services provider - plans to buy an accommodation area worth A$11.8 million (S$11.4 million) that houses staff working in the marine industry in a part of Australia.

Through AusGroup's unit, the group has signed a general deed of settlement and release with Charisma Energy Services (CES), Aus Am Pte Ltd and Kingpost 2 International, under which all legal title and interests in the accommodation village and ancillary facilities (the village) located at Port Melville on Melville Island in the Northern Territory of Australia, would be transferred to the company, AusGroup said on Tuesday. The transfer comes without mortgage or security interests.

The area comprises a 119-man accommodation camp, kitchen, administration building and recreational facilities at Port Melville. BT reported this month that AusGroup's Northern Territory port and marine business has established a fuel distribution business in the area.

The purchase figure accounts for the global settlement of obligations between a related party of CES and the group, the restructuring of the shareholder’s loan from a related party of CES to the group, resolution of obligations relating to the village between the sellers, and the valuation of the village. The acquisition will be made in cash.

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AusGroup said this deal comes as part of a long-term corporate strategy, through which it is exploring all strategic options including acquisitions and divestment of the group’s assets.

"The board is of the view that the proposed transfer of title, if completed, could potentially lead to strategic divestment plans for Port Melville and improving the group’s financial performance and position over a longer term."

Among other things, this deal needs to secure approval from the financier of the village for CES and Aus Am before it can proceed further. CES and Aus Am need to get approval by May 15, 2019.

Shares of AusGroup closed on Monday at S$0.035.