Turkish construction company RC Rőnesans Inşaat Taahhűt (Renaissance Construction) has made an offer for Ballast Nedam, the Dutch-based contractor.

The offer, which has been backed by Ballast Nedam’s Central Works Council, is a cash deal which values shares in the Dutch company at €0.30 each. The offer is expected to be worth €6 million in total.

This represents a reduced bid from an initial offer of €1.55 per share, after a profit warning from Ballast Nedam. In early September, the Dutch company reported additional losses of approximately €20 million which it attributed to deteriorating results in the building and development division.

It also blamed the effects of three recent bankruptcies of suppliers and partners, including Imtech Building Services.

Renaissance and Ballast Nedam said the offer reflected the long-term growth of both companies. They said that Ballast Nedam would benefit from “a strong shareholder” that was willing to inject capital to “increase its solvency and reduce its vulnerability”. It was also said that Ballast Nedam would be less vulnerable to the consequences of cost overruns on large projects.

It was added that Ballast Nedam would also benefit eventually from international expansion to higher margin business that the companies said would not be available to the Dutch contractor as a standalone business. All the necessary clearances for the deal are said to have been obtained.

Renaissance already owns 29% of Ballast Nedam.

If it manages to purchase more than 95% of the shares, Renaissance said it would procure the aggregate capital contribution of €47.6 million. If it falls below that percentage, it said its financial contribution would be in the form of a rights issue.

In its half-year figures, issued in July, Ballast Nedam reported an operating loss of €10 million, which included €4 million in restructuring costs. Its net loss of €15 million reported then compared to €51 million for the same period a year earlier.

Renaissance Construction is an international contractor operating in general building, heavy industries and power, manufacturing and chemical plants, transportation and social infrastructure sectors. Operating in 20 countries, Renaissance Construction’s home markets are Russia and Turkey, while it claims significant operations in Turkmenistan as well as CIS region, the Middle East, Switzerland and Germany.

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