Downer (ASX:DOW) share price lifts on $150 million payday

The company’s shares are set to finish the week on a positive note.
The post Downer (ASX:DOW) share price lifts on $150 million payday appeared first on The Motley Fool Australia. –

The Downer EDI Limited (ASX: DOW) share price is edging higher on Friday afternoon. This comes after the company announced an update on the divestment of its Open Cut Mining East business.

At the time of writing, the integrated services company’s shares are 1.45% higher to $5.97.

Downer concludes divestment

In its release, Downer advised it has completed the sale of its Open Cut Mining East business to Bukit Makmur Mandiri Utama (BUMA).

Established in 1998, BUMA is currently the second largest independent coal mining contractor in Indonesia. The company holds around 20% market share in the country, providing coal mining services to large Indonesian firms.

BUMA’s operations are supported by roughly 12,000 employees as well as being equipped with over 2,500 units of heavy equipment.

Downer will receive about $150 million in cash proceeds for its Open Cut Mining East business. So far, BUMA has paid a deposit of $16 million with the remaining amount to be paid in the immediate future.

The transaction includes the transfer of the assets, liabilities, employees and all existing contracts.

This is Downer’s last step in exiting its capital-intensive mining businesses. The divestment includes the Open Cut Mining West, Downer Blasting Services, Underground mining, Otraco, the Snowden consulting business and the RTL Mining and Earthworks joint venture.

Together, the total proceeds from the company’s divestment program amount to $778 million.

It appears that the additional cash injection has rallied investors, having a positive effect on the Downer share price.

About the Downer share price

Over the past 12 months, the Downer share price has gained 11% with year-to-date around 12% in the green. Interestingly, the company’s shares fell from their 52-week high of $6.87 in October after announcing the sale of the Open Cut Mining East business.

Based on today’s price, Downer commands a market capitalisation of around $4.09 billion and has approximately 685.62 million shares outstanding.

The post Downer (ASX:DOW) share price lifts on $150 million payday appeared first on The Motley Fool Australia.

Should you invest $1,000 in Downer right now?

Before you consider Downer, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Downer wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Strike Energy (ASX:STX) share price leaps again, up 21% this week. Here’s why

Carnaby Resources (ASX:CNB) share price explodes 46% on ‘spectacular’ copper find

Is the A2 Milk (ASX:A2M) share price now too cheap to ignore?

Could Qantas (ASX:QAN) shares prove to be a compelling investment in 2022?

Why the De Grey Mining (ASX:DEG) share price is storming 7% higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!