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Business Update And Voluntary Suspension Of Trading Of Murray & Roberts Shares
MURRAY & ROBERTS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1948/029826/06
JSE Share Code: MUR
ADR Code: MURZY
ISIN: ZAE000073441
("Murray & Roberts" or the "Group")
BUSINESS UPDATE AND VOLUNTARY SUSPENSION OF TRADING OF MURRAY & ROBERTS SHARES
INTRODUCTION
Stakeholders are referred to the JSE Limited ("JSE") Stock Exchange News Service ("SENS")
announcement of 5 November 2024 where the Group updated the market on its deleveraging plan as
well as liquidity constraints experienced in its South African operations, and developments with the De
Beers Venetia contract ("the Venetia contract").
Although the Group, through Murray & Roberts Limited, has significantly reduced its debt with a
consortium of four South African banks ("the Banking Consortium"), Murray & Roberts Limited has 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 gave rise to unnecessary and
substantial losses in Murray & Roberts Limited.
In an unrelated development, Murray & Roberts Cementation's South African operations were impacted
by the recent descoping of the Venetia contract. This contract represented more than 50% of Murray &
Roberts Cementation's business in South Africa.
As reported on SENS on 30 August 2024, the Group reached an agreement with the Banking Consortium
with regard to the remaining R409 million debt, which provides for this debt to be repaid by 31 January
2026.
The board of directors of Murray & Roberts Holdings Limited ("the Holdings Board") has resolved to
commence a process of disposing of non-core assets to meet the Group's obligations to the Banking
Consortium and restore liquidity to Murray & Roberts Limited. If required, shareholder approval for asset
sales will be sought at the appropriate time.
MURRAY & ROBERTS GROUP STRUCTURE
The Group mainly focuses on providing specialised engineering and contracting services to the global
mining industry through its core operating companies: Murray & Roberts Cementation Pty Ltd,
Cementation APAC (Pty) Ltd, Cementation Canada Inc., and Terra Nova Technologies Inc.
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.
The Group's organisational structure is as follows:
• Murray & Roberts Holdings Limited is the publicly listed parent company.
• Through two wholly-owned passive subsidiary companies, it owns 100% of Murray & Roberts
Limited.
• Murray & Roberts Limited, housing the Group's corporate office, has one operating division, being
OptiPower, and it holds 100% of the shares in several operating subsidiaries, including:
1. Murray & Roberts Cementation Pty Ltd, which carries on business as a mining contractor
in South Africa and which serves as the holding company for various wholly owned mining
subsidiaries in Southern African.
2. Murray & Roberts United Kingdom Limited, which holds Cementation APAC (Pty) Ltd,
Cementation Canada Inc, and Terra Nova Technologies Inc., all providers of mining
contracting services.
MURRAY & ROBERTS LIMITED – BUSINESS RESCUE RESOLUTION
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.
Following extensive modelling and testing of all viable options to address Murray & Roberts Limited's
liquidity constraints, the board of directors of Murray & Roberts Limited ("the Subsidiary Board") believes
that, based on best estimate budgets, the company's 6-month cashflow is deemed to be vulnerable to
the following risks:
- The timeframes within which shareholder approval could reasonably be obtained for the disposal of
non-core assets;
- Final losses in OptiPower as a result of delays in procurement and project progress.
The uncertainty over agreement on key issues pertaining to the descoping of the Venetia contract and
the timeframes within which new work in the Zambian copper mines could replace part of the lost Venetia
financial contribution were also factored in as Murray & Roberts Cementation has been a source of cash
flow to Murray & Roberts Limited in the past.
The Subsidiary's Board therefore believes that Murray & Roberts Limited meets the definition of being
"financially distressed" as contemplated in the Companies Act, 71 of 2008, as amended (the "Companies
Act") and that there appears to be a reasonable prospect of it being rescued.
Considering the risks outlined above and given the uncertainty regarding that company's short-term
cashflow, the Subsidiary Board is of the opinion that:
- The best option to ensure the sustainable restoration of Murray & Roberts Limited is to commence
business rescue of that company, which incorporates OptiPower as a trading division;
- Under the direction of an experienced Business Rescue Practitioner ("BRP") a return to sustainability
has been assessed as readily achievable; and
- The business rescue process could incorporate some or all of the Group's deleveraging plan.
After discussions with certain of Murray & Roberts Limited's largest creditors and other stakeholders, the
Subsidiary Board accordingly resolved on 21 November 2024 to commence voluntary business rescue
proceedings of Murray & Roberts Limited, which incorporates Optipower (its trading division).
Representatives from Metis Strategic Advisors were appointed as BRP.
The Subsidiary Board considers this decision to be prudent and in the best interests of all stakeholders,
including the shareholders, and will be supportive as the BRP develops and implements the business
rescue plan.
The requisite documents will be lodged with the Companies and Intellectual Property Commission
("CIPC") on 22 November 2024.
MURRAY & ROBERTS HOLDINGS LIMITED AND ITS CORE UNDERGROUND MINING COMPANIES
CONTINUE AS GOING CONCERNS
Murray & Roberts, as well as its indirect subsidiaries, being Murray & Roberts Cementation Pty Ltd,
Murray & Roberts United Kingdom Limited, Cementation APAC (Pty) Ltd, Cementation Canada Inc., and
Terra Nova Technologies Inc., continue as going concerns, delivering on their contractual obligations with
good prospects into the future.
VOLUNTARY SUSPENSION OF TRADING OF MURRAY & ROBERTS SHARES
In light of the above, the Holdings Board applied to the JSE for the voluntary suspension of trading of
Murray & Roberts' shares in terms of paragraph 1.10 of the JSE Listings Requirements, and this request
has been approved by the JSE with immediate effect.
This decision has not been taken lightly. Whilst the Holdings Board is conscious that some shareholders
or potential investors would prefer to retain the ability to buy and sell shares, the Holdings Board believes
that the temporary suspension is in the best interests of all shareholders.
Shareholders will be updated as further material information becomes available.
Henry Laas, CEO of Murray & Roberts, commented:
"It is important to note that only Murray & Roberts Limited and its trading division, OptiPower, is placed
in business rescue. The Group's core assets by value and earnings contributions are its underground
mining businesses, which will continue to operate as going concerns, delivering on their contractual
obligations with good prospects into the future.
"The Holdings Board is confident that Murray & Roberts Limited is well suited for a successful business
rescue. The Group remains solvent as disclosed in its financial statements 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.
"We will continue with the process of disposing of non-core assets and it is our expectation that the
disposals will realise sufficient cash to settle the outstanding debt of R409 million owed to the Banking
Consortium and most of, if not all 'post commencement finance' provided by the business rescue funding
providers."
Bedfordview
22 November 2024
Sponsor
The Standard Bank of South Africa Limited
Date: 22-11-2024 12:46:00
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