Modulaire - comment
A number of you have enquired about the potential sale of Modulaire’s Australian business. Brookfield will be reluctant to sell the Australian business. They will only proceed if they are bearish on when the European construction sector recovers. In our model, Modulaire has sufficient liquidity to sustain it through to our expected improvement in H2 26. Assuming the AUS$1bn mentioned in the article is correct and there is AUS$253m of debt at the (100% owned Australian subsidiary), the net proceeds to Modulaire for debt reduction would be around AUS$750m (or €500m). We would expect Brookfield to look for a higher amount; GS is touting the business as an infrastructure rather than a construction play to raise its valuation. A PE buyer is going to try to push for more stressed pricing. If they can source an infrastructure investor, they might be able to achieve a higher multiple for a "strategic asset."
The €500m is the net proceeds of AUS$1bn less AUS$253m debt at the subsidiary level => AUS750m => c€500m. The Australian business is performing well; Brookfield will be looking for something closer to AUS$1.25bn.