By Gillian Tan

Australia’s equity capital market may be in the doldrums, but mining and energy services provider AusGroup Ltd. prefers it to Singapore.

The Western Australia-based group says a sole listing on the Australian Securities Exchange will help it raise capital because investors here are more knowledgeable about the resources sector.

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AusGroup is currently listed in Singapore with a market value of 216 million Singapore dollars (US$176.1 million). But it generates over 95% of its revenue in Australia providing services for clients including BHP Billiton Ltd ., and has around 2,500 employees based down under.

Chief Executive Officer Laurie Barlow said joining the ASX will provide better value to shareholders than a dual listing, because it is the world’s largest mining and resources exchange.

The strategy will involve AusGroup demerging all of its subsidiaries into a group headed by its wholly owned unit, AGC Australia Pty Ltd. The next step will be to find one or more assets that will enable a reverse takeover of AusGroup Ltd. for it to remain listed on the Singapore Stock Exchange. At that point, AGC Australia will seek a sole listing on the ASX.

“The company will be in a better position to raise capital in Australia given the inherent familiarity of that exchange with resources services companies, which will help fund its organic growth and increase its leverage in pursuing growth acquisitions,” Mr. Barlow said.

He added an ASX listing would lift the company’s profile in Australia and attract and retain staff, a key ingredient in achieving future growth targets, expanding its client base and improving its ability to tender for large projects.

Last month, the company reported an order book stands of 324 million Australian dollars (US$338 million). It is currently working on a handful of mine sites including BHP’s Jimbelbar Project in Western Australia’s Pilbara region.

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