The administrator for RCR Tomlinson has found a buyer for its energy division as it continues to reorganise the engineering group and pay off its debt.

ASX-listed The Environmental Group Limited (EGL) has agreed to acquire the assets of RCR Energy Service. The service provider for heat transfer plant and equipment, which operates from facilities around Australia, generated sales of A$21.5 million in its 2018 financial year, alongside earnings before interest and tax of A$1.5 million ($15.3 million).

The sold company’s primary focus is on commercial gas and steam boilers, as well as thermal oil heaters and hot water heaters. The transaction follows the divestment of the RCR O’Donnnell Griffin’s Rail business to John Holland, in late December.

EGL said the acquisition was part of its strategy to “establish a footprint in each Australian state and build an environmental business to improve air quality, reduce carbon emissions, enhance waste-to-energy production and lift water quality. In particular, RCR Energy Service is an essential link in our strategy to build a bio/waste-to-energy platform as part of the technology acquired enables a combination of gases and waste energy sources to be used to produce electrical power or steam.”

RCR’s administrator said the deal was expected to complete in the second half of January and it was confident of achieving further sales in the near term.

As of the end of its 2018 financial year, RCR Tomlinson had total liabilities of A$581.3 million alongside cash and equivalents of A$89.9 million.