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M&R reports progress in bid to regain control of Australian mining business

M&R CEO Henry Laas

M&R CEO Henry Laas

Photo by Creamer Media's Donna Slater

28th March 2023

By: Terence Creamer

Creamer Media Editor

     

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JSE-listed engineering and construction company Murray & Roberts (M&R) has announced developments that could result in it regaining control of RUC Cementation Mining Contractors (RUC), its Australian mining subsidiary that was lost to the group when its Australian holding company, MRPL, and Clough entered administration in December.

In a statement to shareholders, it was reported M&R, MRPL and the administrators had, on March 24, entered into a binding Deed of Company Arrangement (DOCA) term sheet that could result in RUC reverting to M&R’s ownership by the end of June.

The DOCA is subject to several conditions precedent, including approval by MRPL creditors and credit approval. The terms remain confidential, but will be made available in the administrators’ report to creditors ahead of a meeting that is expected to be held in mid-May.

“Should the conditions precedent to the DOCA be met, it is expected that the DOCA will be implemented by 30 June 2023,” M&R said in a statement.

“The execution of the DOCA term sheet reflects an important first step in the group’s efforts to regain control of RUC.

“Should the DOCA complete, RUC will be reinstated within the group and the full scale and capability of the group’s multinational mining platform would be re-established.”

The process represented a significant development for M&R, which had previously described its loss of control over RUC as having been a “particularly tragic” consequence of the MRPL administration process.

The loss of RUC meant that the group’s mining platform currently comprised only two regional businesses in Africa and the Americas, which had combined orders worth R14-billion at the end of December.

CEO Henry Laas initially expressed pessimism about M&R’s prospects for regaining control in a bidding process, with the DOCA now representing an alternative to such a process.

He also reported that a startup business had been registered in Australia with the intention of restarting a mining business in that territory should it fail to regain control of RUC.

However, he also stressed that regaining RUC was first prize, as it previously contributed about one-third to its mining platform.

With the loss of Clough, the mining platform formed the core of the downscaled M&R, which had also retained a unit in sub-Saharan Africa, which focused on a power, industrial and water projects.

That platform had an order book of R2-billion at the end of December, arising mainly from renewable energy and transmission projects in South Africa.

Edited by Creamer Media Reporter

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