JSE-listed Murray & Roberts (M&R) Holdings has confirmed that its mining businesses will be sold, following the approval of a business rescue plan (BRP) by an overwhelming majority of creditors.
The mining businesses will continue under a new structure, M&R Holdings points out.
In terms of the BRP, M&R Limited’s (MRL's) main assets, including Murray & Roberts Cementation, Cementation Canada and Terra Nova Technologies – all of which provide mining and allied contracting services across the world – will be sold to a consortium of investors led by Differential Capital.
The Differential investors have already invested in MRL through the provision of post-commencement funding since the start of the business rescue process of MRL in November 2024. These investments provided the group with sufficient cash flow to continue its operations, allowing the business rescue practitioners to find viable alternatives to the potential liquidation of MRL.
“The Differential investors are well capitalised and have expressed their appreciation of M&R's expertise as a provider of mining contracting services, which rivals the best in the world, and the importance of preserving this capability,” comments M&R CEO Henry Laas.
Proceeds from the sale of the mining businesses are expected to be sufficient to fully settle MRL’s secured creditors, which include a consortium of four South African banks, as well as the providers of post-commencement funding.
In addition, the disposal proceeds will cover the payment of retrenchment packages for staff at the group’s head office, and at Optipower, a division of MRL. Unsecured or concurrent creditors are estimated to receive between 5c and 10c in the rand.
As proceeds from the asset disposals will not be sufficient to settle unsecured creditors, there will be no distribution to shareholders in the listed entity, MRH.
The Differential investors may, however, grant shareholders an opportunity to co-invest fresh equity into the new ownership structure, alongside the Differential investors.
The disposal of the mining businesses will leave MRH without any operating companies and, therefore, without any prospects of generating cash through operations or being able to recapitalise the group.
Since the company’s liabilities exceed its assets, it is commercially insolvent, and the board of directors will recommend to shareholders that MRH be voluntarily wound up. 