Ann: FBU Enters Agreement to Divest 50pc of Fiji Construction, page-2

Strange announcement.

$40m asset sale in the context of a $9bn asset base... not even a rounding error.

That said, there are a few takeaways that one could make:

1. Selling an asset at 57% of its carrying value is somewhat of a comment about the shareholder value-diluting empire building that a succession of FBU executives have undertaken over the past 15 years, spurred on by dirt cheap cost of capital.

2. Why invest in, let alone operate and retain, a business that represents a mere 0.045% of your asset base?

3. I suspect FBU's portfolio contains many of these sorts of illogical, sub-scale business units which contribute negligible earnings and therefor are probably just a drain on management time and focus.

4. In the light of the above comments, if this portends something of a root-and-branch, strategic review of the company's asset base, it could be the start of a much-needed asset rationalisation phase which has the potential to restore part of the shareholder value that has been destroyed. But it is tantamount to unscrambling the egg, so I don't think one should hold one's breath.