JSE-listed engineering and construction group Murray & Roberts (M&R) has failed in its initial bid to regain control of RUC Cementation Mining Contractors (RUC), which was lost to the group when its Australian holding company entered administration in December, together with Clough.
M&R told shareholders on Tuesday that it had received notice from the administrators on July 3 that certain conditions precedent related to a Deed of Company Arrangement (DOCA) proposal term sheet prepared as part of an effort to regain control of RUC had not been satisfied and had, thus, been terminated.
Group investor and media executive Ed Jardim told Engineering News that M&R would continue to explore a way forward to regain control of RUC.
“We just won’t be in an exclusive process through the DOCA anymore.”
Jardim confirmed that a receiver had been appointed to run RUC in the interim and RUC could either be sold or the creditors might decide to take over the running of the business.
M&R also recently established Cementation APAC as a possible alternative vehicle to provide engineering and contracting services to mining clients in the Asia Pacific region, but had viewed regaining control of RUC as its preferred option.
Cementation APAC is based in Perth and is overseen by the group’s mining platform CEO, Mike da Costa.
“The Cementation brand is well known in the global mining space and the group will continue to target Australian mining opportunities in joint venture with our businesses in North America, Cementation Americas, and Murray & Roberts Cementation in sub-Saharan Africa,” Jardim said.
RUC previously contributed about one-third to M&R’s mining platform and its loss meant that the group’s mining platform currently comprised two regional businesses in Africa and the Americas.
The remaining mining platform had combined orders worth R14-billion at the end of December.
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 is focusing on power, industrial and water projects.
M&R’s shares fell 6% to 93 cents a share immediately after the RUC statement was issued.