Murray & Roberts Limited in business rescue, as holding company suspends JSE trading

Subsidiary facing serious liquidity constraints.

Murray & Roberts Holdings Limited, which is listed on the JSE, has applied to the bourse for the voluntary suspension of trading of its shares and this has been approved “with immediate effect,” the group said on Friday.

This move comes has the group has applied for its South African Murray & Roberts Limited business to go into voluntary business rescue.

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Read: M&R works to regain control of its Australian mining business

After discussions with some of its largest creditors and other stakeholders, it was resolved on 21 November that the group will commence voluntary business rescue proceedings of Murray & Roberts Limited, which incorporates Optipower (its trading division), the group said in a filing on Sens.

Metis Strategic Advisors were appointed as the business rescue practitioners.

“The subsidiary board considers this decision to be prudent and in the best interest of all stakeholders, including shareholders, and will be supportive as the business rescue practitioners develop and implement the business rescue plan,” the group added.

Murray & Roberts Limited has been experiencing significant liquidity constraints that arise from losses in its South African trading division OptiPower.

This “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,” the group noted.

Read: Macpherson aims to turn SA into a construction site and declares war on ‘construction mafia’

The JSE-listed group earlier announced that it has reached an agreement to repay its remaining R409 million debts by 31 January 2026 and that it would dispose of non-core assets in an attempt to restore liquidity.

The sale of these assets is however subject to shareholder approval, and the timeframe of such approvals and final losses in OptiPower as a result of delayed procurement and project progress put its six-month cashflow at risk.

The group said that there appears to be a reasonable prospect of the subsidiary being rescued.

Where the suspension of share trading is concerned, the group said the decision had “not been taken lightly”. ADVERTISEMENT: CONTINUE READING BELOW

“Whilst the holding board is conscious that some shareholders or potential investors would prefer to retain the ability to buy and sell shares, the board believes the temporary suspension is in the best interests of all shareholders.”

Read: State signs historic agreement to stop the construction mafia

CEO Henry Laas said the group will continue with the process of disposing of non-core assets and that it will realise significant cash to settle the outstanding debt.

He stressed that the group remains solvent as disclosed in its financial statements for the year ended June 2024.

“The group’s core assets by value and earnings contributions are its underground mining businesses, which will continue to operate as going concerns … with good prospects into the future,” Laas adds.

Listen/read: M&R’s going concern status in question [Aug 2023]

Murray & Roberts Holdings’ share price

The group’s stock has taken a battering over the past ten years on the JSE. Its last recorded share price was R1.10 from a high of R20.41 in December 2014.

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