[Image: Murray&Roberts / Facebook]
The COVID-19 pandemic has claimed yet another South African business titan – Murray & Roberts Limited, once a powerhouse in construction, mining, and engineering.
On Thursday, Murray & Roberts announced it will sell its core mining assets to a consortium led by Differential Capital. The move comes after significant COVID-induced disruptions to its operations.
The asset sale is expected to generate enough cash to fully settle debts with secured creditors, while unsecured creditors will recover between 5 to 10 cents on the rand. This sale forms the cornerstone of a business rescue plan overwhelmingly approved by creditors on 8 April 2025.
With the company now commercially insolvent, the board of directors has recommended a voluntary winding-up. Trading in the company’s shares was suspended late in 2024.
In its latest financial results, the group posted a R1.38 billion loss for the six months to December 2024, nearly R1 billion of which stemmed from discontinued operations.
“The Differential Investors are well capitalised and have recognised the world-class capabilities of Murray & Roberts in mining contracting. They are committed to preserving this expertise,” said CEO Henry Laas.
Proceeds from the mining business sale are earmarked to settle outstanding debt owed to a consortium of four major South African banks. Once finalised, the disposal will leave Murray & Roberts without any operating entities or viable means of recapitalisation.
Moneyweb reports that COVID-19 dealt a crushing blow to the group, particularly through halted dividends from its stake in the Bombela Concession Company, the operator of Gautrain. This severely strained liquidity and working capital, despite efforts to reduce SA bank debt from R2 billion to R409 million.
By August 2024, the company had reached a deal with its lenders to sell non-core assets to settle remaining debt. However, it was still short R350 million needed for working capital.
Financial strain worsened due to ongoing losses from OptiPower, a division focused on energy infrastructure. Project delays and procurement issues plagued the unit, deepening the company’s cash crisis.
The final blow came with the descoping of its Venetia diamond mine contract, which accounted for over half of the South African operations of Murray & Roberts Cementation.
These cumulative setbacks created a “perfect storm,” bringing an end to one of South Africa’s most iconic industrial brands.
[Source: Moneyweb]
