IM, which last year tried to enter the zinc market under a deal with Rox Resources, has since teamed up with the man who ran the oil and gas service business of Resource Equipment until its takeover in 2015, Michael Shelby, to kick start Babylon Operations.
Shelby, an experienced international oil and gas executive who grew REL from its inception to a $12 million per annum concern, established Babylon with some $1 million in seed funding earlier this year.
IM has an option until October 3 to act as the vehicle for the company's backdoor listing.
Babylon aims to be a second tier concern behind original equipment manufacturers, and aims to specialise in equipment rental and diesel services.
The equipment rental arm owns and rents specialised pumping equipment and providing operators and technicians for the oil and gas and mining sectors, such as process and pipeline maintenance, wellhead and well service work, decommissioning services and mine dewatering and water management.
The diesel arm will repair and maintenance of client equipment with a specific emphasis on rebuilding and providing maintenance for large diesel engines similar to the Babylon rental fleet.
The engine rebuild service is focussed on engines of 1000hp or greater.
Babylon's point of difference is that it will focus on smaller underserviced equipment owners, flexible parts and labour supply, with in-house testing capability at its newly acquired workshop Forrestfield, Western Australia, near the Perth Airport.
Babylon's initial focus has been on diesel engine services and work has commenced on contracts with companies in the mining and earthmoving sectors for engine and component rebuilds, and that will be the focus as it continues to build up its rental fleet.
It is quoting for multiple rental projects for the second half of the year, and it has generated around $350,000 in revenue for the end of August.
Additional equipment will be mobilised in July and quotes are outstanding with two clients for long-term rental of power generation in excess of $2 million per year each. Award of these projects is expected in the third quarter, by which time Babylon expects to be a listed company.
Babylon has also begun discussions with several larger mining companies for large engine rebuilding work, quoting $1.5 million to an international heavy equipment component supplier.
Babylon expects to be profitable before the end of the year from projected revenue of $5.7 million.
Target clients include the likes of Baker Hughes, Halliburton, Schlumberger, Quadrant Energy, PTTEP and Buru Energy in the oil patch, and big miners such as Fortescue Metals Group and BHP in the hard rock sphere.
IM raised $498,000 from a rights issue in May, underwritten by Patersons Securities, to repay creditors and help fund the acquisition of Babylon.
The raising was backed by Chesapeake Capital, a pooled development fund under the control of James Cillen, who was REL's former managing director.
The company will change its name to Babylon Pump & Power on listing.
