BEE group acquires Murray & Roberts' infrastructure and building unit
Engineering and construction group, Murray and Roberts (M&R) sold its infrastructure and building business for R314 million to a black economic empowerment group‚ Firefly Investments.
The Johannesburg-based company will now focus on three core sectors – oil and gas, metals and minerals, and power and water – “which present long-term sustainable growth potential to the group,” Murray & Roberts Chief executive Henry Laas said on Tuesday.
“This transaction is about Murray & Roberts exiting a specific market sector,” he added.
The infrastructure and building businesses comprise civil engineering‚ general building‚ opencast mining‚ road and earthworks‚ among others.
Murray & Roberts said it would use the proceeds of the deal‚ which is still subject to shareholder and regulatory approval‚ to reduce its net debt.
The transaction excludes the Murray & Roberts group of companies' interests in the Bombela Concession Company‚ Bombela Civils Joint Venture‚ Bombela Operating Company and the Murray & Roberts Middle East operations.
Firefly Investments represents a consortium led by Southern Palace, a black-owned industrial group, which includes the Government Employees Pension Fund (GEPF) and members of MRIB’s management as shareholders.
“We are delighted to have concluded this transaction, which sees us acquiring a strong Southern African asset with vast capabilities,” Southern Palace CEO Lucas Tseki said.
In October, M&R sold Genrec Engineering, its only remaining manufacturing business, to Nisela Capital for R185 million.
M&R first announced its intention to sell its infrastructure unit in August when it also said it would look at selling Genrec.
The construction industry has slowed sharply as government contracts, which big companies depend on, stall and weak commodity prices hit demand from the mining industry.
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