Murray & Roberts sells stake to Dutch group

MURRAY & Robert Holdings (M&R), the South Africa-based multinational specialist engineering and contracting group, is selling its stake in the Bombela Concession Company (BCC) to Dutch group Intertoll International Holdings for R1.39 billion cash.

BCC was appointed by the Gauteng provincial government to design, build, operate, maintain and partially finance the Gautrain rapid rail project.

The Gautrain project is a public-private-partnership that includes a 15-year contract for the maintenance and operation of the Gautrain.

M&R said yesterday the proceeds from the deal would be used to reduce debt in South Africa and assist in addressing M&R’s working capital needs.

“The group’s investment in BCC is not strategic and the concession is also set to terminate in 2026,” M&R said.

Intertoll, based in Amsterdam, is a leading European investor in motorway concessions and an independent toll and motorway infrastructure designer and developer, concessionaire, equipment supplier, asset manager and specialist consult for the transport and infrastructure sectors in Europe.

The deal comprises 3.3 million ordinary shares in BCC, or 33% of its share capital and all of the issued shares in Murray & Roberts BCC Financing Company, which is the sole shareholder of Murray & Roberts BCC Holdco Company, which in turn holds 1.7 million shares in BCC, or 17% of its shares.

M&R indicated in June that delivery of its order book was increasingly being disrupted due to a number of issues globally, including supply chain disruptions, and that increased levels of working capital were required to address the dislocation in project cash flows.

M&R’s fair value of its interest in BCC recorded in its annual financial statements at June 30, 2022, amounted to R1.44bn; this after M&R had increased the value by R193m during the year.

M&R also received R185m of ordinary dividends from BCC.

M&R’s share price gained 3% to R5 on the JSE yesterday morning following the release of the announcement – the price has fallen considerably since 12 months ago when it traded at R13.82, much in line with the steadily falling global economic outlook over the period.

But the M&R share price closed 8% down at R4.60 at the close of the day.

M&R last declared a dividend in its 2019 financial year, but for the year to June 30, 2022, it had an order book worth R59.5bn, and earnings before interest tax depreciation and amortisation increased to R705m from R540m.