Murray & Roberts advertising board. Picture: Nonhlanhla Kambule-Makgati / Independent Newspapers
Murray & Roberts Holdings, which first listed on the JSE in 1948, said Friday that while it was solvent, a subsidiary and its local trading companies had gone into business rescue, and the listed shares have been temporarily suspended.
The share price was suspended at R1.10 on Friday, a sharp decline in value from trading at R14.35 per share three years ago, mirroring a steady decline in the financial position of the international, specialised contracting and engineering group over the period.
Headwinds for the group include liquidity constraints, especially in South Africa; the loss of contracts, with the descoping of the Venetia diamond mine a big problem as it accounts for more than 50% of the group local operations; working with reduced working capital despite debt reductions, while the mining business in the Americas had a slow start to the 2025 financial year.
“Only Murray & Roberts Limited (a subsidiary of the listed Murray & Roberts Holdings) and its trading division, OptiPower, are placed in business rescue,” CEO Henry Laas said in a statement on Friday.
“The core assets by value and earnings contributions are its underground mining businesses, which continue to operate as going concerns, delivering on their contractual obligations with good prospects into the future.”
Laas said the group remained solvent, as disclosed in the results for the year ended June 2024, with a portfolio of high-quality assets in its core underground mining businesses.
“On this basis, the Holdings board is confident that a successful business rescue will result,” he said.
He said that the disposal of the non-core assets is anticipated to cover the R409 million outstanding bank debt, as well as most of it, if not all the pre-commencement finance.
He said although they had significantly reduced debt with a consortium of four South African banks, Murray & Roberts Limited had been conducting its business in South Africa with restricted working capital facilities for an extended period.
“This continued illiquidity in Murray & Roberts Limited has negatively impacted its OptiPower operations, a trading division of Murray & Roberts Limited in South Africa, and has given rise to unnecessary and substantial losses in Murray & Roberts Limited,” said Laas.
In an unrelated development, Murray & Roberts Cementation’s South African operations were impacted by the recent descoping of the Venetia contract. De Beers is descoping the Venetia mine due to the transition from open-pit to underground mining, as part of a strategy to extend the life of the mine.
On August 30, an agreement was reached with the banks that provides for the R409m debt to be repaid by January 31, 2026.
The group mainly focuses on providing specialised engineering and contracting services to the global mining industry through its core operating companies: Murray & Roberts Cementation, Cementation APAC, Cementation Canada, and Terra Nova Technologies.
Additionally, the group operates in the South African renewable energy and power transmission and distribution sectors through OptiPower, a trading division of Murray & Roberts Limited.
“It is critical for Murray & Roberts Limited to find a solution for its declining liquidity position, arising principally from the losses in its South African trading division, OptiPower, which has been exacerbated by the descoping of the Venetia contract, as the mining contractor has been a source of cash flow to Murray & Roberts Limited in the past,” said Laas.
Murray & Roberts, as well as its indirect subsidiaries, Murray & Roberts Cementation, Murray & Roberts United Kingdom, Cementation APAC, Cementation Canada, and Terra Nova Technologies, would continue as going concerns, delivering on their contractual obligations with good prospects into the future, said Laas.
“The Holdings board is confident a successful business rescue will result,” said Laas.
BUSINESS REPORT