SYDNEY (Reuters) - Australia’s Seven Group Holdings (SVW.AX) said on Tuesday it would sell its Chinese mining machinery division WesTrac China to Chinese firm Lei Shing Hong Machinery for A$540 million ($428 million).
Lei Shing Hong Machinery is a subsidiary of Chinese conglomerate Lei Shing Hong Ltd (0238.HK) which distributes Caterpillar (CAT.N) earthmoving, mining and construction equipment throughout eastern China and Taiwan.
The Chinese government must approve the deal with the Australian media and mining company, Seven Group said in a statement to the Australian Securities Exchange.
The deal allows Seven Group, which is 73 percent owned by Australian entrepreneur Kerry Stokes, to focus on supplying an infrastructure boom in the east coast Australian states, which the company expects to peak by 2021.
Seven Group Chief Executive Ryan Stokes told Reuters in a phone interview the opportunity was timely to realize value and redeploy capital.
The company reported a 10 percent rise in underlying profit on Tuesday to A$187.1 million, helping to boost its share price 6 percent by afternoon trade to a record high.
Annual profit fell 77 percent to A$44.5 million, due in part to impairments against its media business.
Seven Group Holdings was created from a A$3 billion merger of the Seven and WesTrac businesses in 2010. It also has a 35 percent holding in broadcaster and publisher Seven West Media (SWM.AX).
($1 = 1.2602 Australian dollars)
Reporting by Alison Bevege in SYDNEY; Editing by Richard Pullin