The main businesses in mining will be sold to a consortium of investors led by Differential Capital. Unsecured creditors will receive 5-10 cents in the rand. From Moneyweb.
Covid appears to have claimed another South African business icon, the once mighty Murray & Roberts Limited. The shutdown in travel and the disruption caused by lockdowns was a mountain too steep to climb.
Citing massive disruptions to its business from Covid, Murray & Roberts Limited announced on Thursday that its main assets focused around mining will be sold to a consortium of investors led by Differential Capital.
The sale of these assets will generate sufficient cash to pay all secured creditors, leaving 5-10 cents in the rand for unsecured creditors.
The businesses to be sold include Cementation, Cementation Canada, and Terra Nova Technologies.
This aligns with a business rescue plan agreed by the overwhelming majority of creditors on 8 April 2025.
As this renders the company commercially insolvent, the board of directors has recommended that it be voluntarily wound up. Trading in Murray & Roberts shares was suspended late last year.
The group has announced a loss of R1.38 billion for the six months to December 2024, with nearly R1 billion of this coming from discontinued operations.
Next steps
“The Differential Investors are well capitalised and have expressed their appreciation of Murray & Roberts’ expertise as a provider of mining contracting services, which rivals the best in the world, and the importance of preserving this capability,” said M&R CEO Henry Laas in a statement.
Proceeds from the sale of the mining businesses should allow for settlement of secured creditors, which include a consortium of four SA banks.
There is unlikely to be any surplus remaining for shareholders in the listed entity, Murray & Roberts Holdings, though Differential may grant an opportunity to co-invest fresh equity into the new ownership structure.
The disposal of the mining businesses to Differential will leave the company without any operating companies and no prospects of generating cash or recapitalising the group.
Tough road
Covid dealt a deadly blow to the company, largely due to business disruption and travel restrictions. During this period it received no dividends from its investment in the Bombela Concession Company, which operates Gautrain.
This aggravated its liquidity crisis and restricted working capital, despite paying down its SA bank debt from R2 billion to R409 million.
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In August last year it reached an agreement with the banking consortium to sell off non-core assets to pay the outstanding R409 million, but that left if in dire need of another R350 million for working capital.
This illiquidity continued after August 2024, stemming from losses accumulated in OptiPower, a trading division focused on energy infrastructure – mainly from delays in equipment procurement and project progress.
Another nail in the coffin was the descoping of the Venetia diamond mine contract, which accounted for over 50% of Murray & Roberts Cementation’s South African business.
These factors created a “perfect storm” of troubles, bringing an end to the life of what has been a South African construction, mining and engineering icon.
