JSE-listed Murray & Roberts (M&R) has voluntarily requested a halt within the buying and selling of its shares after saying that its M&R Restricted division and the division’s subsidiary OptiPower have been positioned in enterprise rescue.
M&R, in addition to its oblique subsidiaries Murray & Roberts Cementation, Murray & Roberts UK, Cementation APAC, Cementation Canada and Terra Nova Applied sciences, proceed as a going concern and can proceed to ship on their contractual obligations.
The choice to put M&R Restricted and OptiPower in enterprise rescue follows discussions with sure of the division’s largest collectors and stakeholders.
Metis Strategic Advisors has been appointed enterprise rescue practitioner (BRP).
The group says in an announcement that it’s vital for M&R Restricted to discover a resolution for its declining liquidity place, arising principally from the losses in OptiPower, which has been exacerbated by the descoping of the contract on the Venetia diamond mine.
Following in depth modelling and testing of all viable choices to handle the liquidity constraints, the board believes that, based mostly on finest estimate budgets, the corporate’s six-month cashflow is deemed to be susceptible to the dangers of the timeframes inside which shareholder approval may moderately be obtained for the disposal of noncore property; and last losses in OptiPower because of delays in procurement and venture progress.
Contemplating the dangers and given the uncertainty relating to that firm’s short-term cashflow, the board is of the opinion that the best choice to make sure the sustainable restoration of M&R Restricted is to start out enterprise rescue of that firm.
Beneath the path of an skilled BRP, a return to sustainability has been assessed as readily achievable.
The enterprise rescue course of may incorporate some or the entire group’s deleveraging plan.
M&R has resolved to start out a technique of disposing of noncore property to fulfill the group’s obligations to a consortium of 4 South African banks and restore liquidity.
As beforehand reported, the group reached an settlement with the consortium for the remaining R409-million debt, which supplies for this debt to be repaid by January 31, 2026.
M&R factors out that, whereas the group significantly lowered its debt with the consortium, it has been conducting its enterprise in South Africa with restricted working capital amenities for an prolonged interval.
This continued illiquidity has negatively impacted on OptiPower’s operations and given rise to pointless and substantial losses within the group, it factors out.
In an unrelated improvement, Murray & Roberts Cementation’s South African operations have been impacted by the latest descoping of the Venetia contract. The contract represented greater than 50% of Murray & Roberts Cementation’s enterprise in South Africa.
“It is very important be aware that solely M&R Restricted and its buying and selling division, OptiPower, is positioned in enterprise rescue. The group’s core property by worth and earnings contributions are its underground mining companies, which can proceed to function as going considerations, delivering on their contractual obligations with good prospects into the long run,” group CEO Henry Laas assures shareholders.
“The holdings board is assured that M&R Restricted is nicely suited to a profitable enterprise rescue. The group stays solvent as disclosed in its monetary statements for the yr ended June 30, with a portfolio of high-quality property in its core underground mining companies.
“On this foundation, the holdings board is assured {that a} profitable enterprise rescue will consequence,” he provides.
“We’ll proceed with the method of disposing of noncore property and it’s our expectation that the disposals will realise adequate money to settle the excellent debt of R409-million owed to the banking consortium and most of, if not all ‘publish graduation finance’ offered by the enterprise rescue funding suppliers,” Laas says.
