The Cimic Group Ltd (ASX: CIM) share price is edging higher today after the company announced that it would abandon its Middle East investment.
At the time of writing, the Cimic share price is inching 0.78% higher to $20.71.
The Cimic Group provides a range of services to the infrastructure, resources and property markets. These include construction, mining, mineral processing, engineering, concessions, and operation and maintenance services.
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What did Cimic announce?
The Cimic share price is on the move today after reporting an update on its divestment from its Middle East operations.
In this morning's release, Cimic advised that it has signed a share purchase agreement with SALD Investment LLC.
Under the deal, Cimic will sell its 45% non-controlling interest in Dubai-headquartered BIC Contracting (BICC) for a nominal consideration. SALD is also seeking to acquire the remaining 55% stake of BICC from Cimic's co-shareholder.
The company stated that it would refocus its efforts on major markets including Australia, New Zealand, and the Asia Pacific. Pending customary conditions, the completed sale will eliminate all of Cimic's interests in the Middle East.
SALD will own all of BICC's businesses in the United Arab Emirates, Qatar, Oman, and Saudi Arabia.
Previously, Cimic agreed to contribute a "certain amount" of cash into BICC to meet its contractual obligations with SALD. The company noted that the $1.8 billion write-down was included into its 2019 result. Cimic further advised that any monetary impact related to the sale would not affect its financial statements going forward.
About the Cimic share price
Over the last 12 months, the Cimic share price was relatively stable prior to its results for the full-year ending 31 December 2020 released last week. Its shares plummeted more than 20% as investors ran for the hills. Since then, the company's shares have settled for the moment.
Cimic commands a market capitalisation of $6.4 billion at today's prices.
