The Australian Financial Review
August 10th 2018
by Sarah Thompson Anthony Macdonald
Asia-based alternatives manager OCP Asia has tripled down on privately-owned mining equipment hire company National Plant & Equipment.
Street Talk understands OCP Asia has written another $50 million cheque for National Plant in recent days, to take its exposure to the business to $185 million in three tranches.
The latest raising is expected to help National Plant grow its fleet and business, at a time when there are a few chunky mining contracts up for grabs and utilisation across the market is improving.
The end game – for OCP Asia and National Plant’s shareholders – is expected to be an initial public offering, which could happen as soon as next year. It’s one option being considered.
It comes as small cap – and now mid cap – fundies keep a close eye on listed mining equipment lessor Emeco Holdings.
Emeco’s market value has rocketed to $1.1 billion, with market expectations of 20 per cent revenue growth and 13 per cent earnings growth in the 2019 financial year, according to S&P Capital IQ data. Similar growth is expected in the 2020 and 2021 financial years.
The strong expectations mean Emeco is trading at 19.5-times one-year forward profit and 7.5-times forecast earnings.
No doubt National Plant’s owners would like a similar valuation for their own business.
Indeed National Plant’s story is not dissimilar to Emeco’s. The company was picked up out of administration in July 2016, when it secured funding from OCP Asia.
That funding is understood to have stretched to about $180 million.
National Plant provides mining equipment to a range of clients across the country including BHP Billiton, Rio Tinto, Anglo American and Glencore.
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