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MASTER DRILLING GROUP LIMITED - Voluntary announcement to shareholders: Master Drilling and Ghella announce creation of TunnelPro Joint Venture

Release Date: 05/11/2018 13:55
Code(s): MDI     PDF:  
 
Wrap Text
Voluntary announcement to shareholders: Master Drilling and Ghella announce creation
of TunnelPro Joint Venture

Master Drilling Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2011/008265/06)
JSE share code: MDI
ISIN: ZAE000171948
(“Master Drilling” or the “Company”)



Voluntary announcement to shareholders: Master Drilling and Ghella announce creation
of TunnelPro Joint Venture to combine expertise and unlock key mining and civil
tunnelling projects

Master Drilling, listed on the JSE in South Africa and a world leader in the Raise bore drilling services
industry, has concluded a joint venture (“Joint Venture”) with Ghella SpA (“Ghella”), a leading Italian
Construction Company in the construction of major infrastructure projects worldwide. The Joint
Venture will operate under the newly registered Italian company, TunnelPro and will pursue tunnel
boring projects in the smaller scope civil construction and broader mining industries while also
offering select product supply and professional services to industry third parties.

Commenting on the Joint Venture, Danie Pretorius, Master Drilling’s CEO, said: “This Joint Venture
is aligned to our strategy of pursuing a wider and more diversified footprint. Through
TunnelPro and Master Tunnelling, Master Drilling will access projects in new sectors and
across various countries whilst providing a platform for further vertical integration and risk
mitigation.”
Through the Joint Venture, Master Drilling and Ghella have acquired the business and trademarks of
SELI Technologies s.r.l. (“SELI”), an Italian company that designs and manufactures tunnel boring
machines and offers project support through professional services for the civil construction industry.
SELI was contracted by Master Drilling in constructing a Mobile Tunnel Borer (“MTB”) to be used
specifically in the horizontal and near horizontal development of mines, which is believed to cater for
80% of the underground mining industry’s access and contact tunnel infrastructure. The MTB was
successfully commissioned at an Italian quarry site recently and will join Master Tunnelling’s fleet, the
Master Drilling subsidiary which will operate it.

“The acquisition of SELI also gives us access to critical intellectual property and a deeper pool
of skills, from engineers to experienced tunnelling personnel. I believe access to such skills
will strengthen the overall competitive offering of TunnelPro and Master Tunnelling and help
us to advance our tunnelling ambitions,” added Koos Jordaan, Master Drilling’s Executive tasked
with furthering Master Drilling’s tunnelling strategy.

Through TunnelPro, Ghella will be able to access mining sector projects in which Master Drilling is
well entrenched, while Master Drilling will further diversify its activities into the smaller civil and
construction sectors requiring tunnel boring. The Joint Venture thus brings together two highly skilled
and experienced companies and aptly positions them to become even more significant players in                                                                                                      
specialised infrastructure projects worldwide. The acquisition of SELI will further complement the skills
and expertise provided by the Joint Venture partners.

Lorenzo Ghella, Vice President of Ghella, concluded: “We are pleased to partner with Master
Drilling to explore new opportunities. The Joint Venture brings together two specialised sets
of skills with complementary sector expertise to share the risk and upside of specific
tunnelling projects.”

Founded in Italy in 1894, Ghella has a rich history, with unique skills and experience in underground
works, renowned worldwide for its experience and know-how in the use of Tunnel Boring machines.
The company is involved in the construction of many infrastructure projects such as subways,
railways, motorways, water and hydraulic works around the world. Master Drilling is an innovative
South African company founded in 1986, which exploits technology to deliver disruptive, customised,
safe and blast-free drilling solutions to its clients.

The joint venture will be owned 51% by Ghella and 49% by Master Drilling. The purchase
consideration for the shares in SELI Technologies contributed by Master Drilling will be settled from
available internal resources.


Fochville
5 November 2018

Sponsor
Investec Bank Limited




                                                                                                        

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