The merger between MDM Engineering Group, the AIM-listed minerals process and project management company focused on the mining industry, and Australia-based Sedgman, has been delayed.As stated in an announcement on 28 November 2012, the merger between the two companies remained subject to a number of conditions precedent. MDM has confirmed that due to recent volatility in commodity prices, notably the gold price, some of its prospective clients have decided to reassess the timing of commencement of certain large scale expansion projects. The delay in a couple of these projects will result in MDM not being able to satisfy the condition precedent contained in the merger implementation agreement (MIA) agreed with Sedgman as announced on 28 November 2012 relating to the company’s orderbook.
MDM noted that, as certain condition precedents have not been waived, the parties are currently in the late stages of negotiating revised merger terms, and that both MDM and Sedgman still believe that there are strong strategic merits to the merger, and an amended and re-stated MIA to reflect the revised terms is expected to be finalised shortly.Despite the delay experienced in the commencement of the projects noted above, MDM said it continues to field a high level of enquiries regarding project feasibility and construction work and is confident of securing additional execution projects during the course of the 2014 financial year, to supplement the company’s existing record order book. As previously announced on 5 February 2013 and 13 March 2013, both approvals from Tanzania and South Africa competition commissions have already been obtained and therefore new approvals are not required. MDM said further updates would be provided once the amended and re-stated MIA is executed and the MDM notice of meeting is issued.