M&R - CAUTIONARY

MURRAY & ROBERTS HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/29826/06)
("M&R" OR "THE GROUP")

ANNOUNCEMENT TO SHAREHOLDERS AND FURTHER CAUTIONARY
1. INTRODUCTION

SHAREHOLDERS ARE REFERRED TO THE CAUTIONARY ANNOUNCEMENT DATED 14 DECEMBER 1998
REGARDING M&R'S PLANS FOR RESTRUCTURING.

M&R CONDUCTED A STRATEGIC REVIEW OF ITS LONG-TERM OBJECTIVES EARLY IN 1998.
THIS RESULTED IN A DECISION THAT IT SHOULD FOCUS ITS BUSINESS ACTIVITIES IN
AREAS WHERE IT HAS SIGNIFICANT MARKET LEADERSHIP, IS INTERNATIONALLY

COMPETITIVE AND IS ABLE TO BUILD UPON ITS STRONG CONTRACTING, ENGINEERING AND
LOGISTICS CAPABILITIES.

ALTHOUGH CONSIDERABLE PROGRESS HAS ALREADY BEEN MADE IN THIS REGARD, THE
CHANGING DYNAMICS IN BOTH THE DOMESTIC AND GLOBAL ECONOMIES HAVE NECESSITATED
THAT M&R EXPEDITES ITS RESTRUCTURING PLANS. DEUTSCHE MORGAN GRENFELL HAS
ACCORDINGLY BEEN APPOINTED TO ADVISE THE M&R BOARD ("THE BOARD") ON THE
RESTRUCTURING PROCESS.
2. THE RESTRUCTURING

FOLLOWING AN IN-DEPTH ANALYSIS OF THE GROUP'S PORTFOLIO, IT HAS BEEN CONCLUDED
THAT M&R'S CORE CONTRACTING OPERATIONS AND BUSINESSES ALLIED TO THEM WILL FORM
THE PLATFORM FOR FUTURE INVESTMENT AND GROWTH STRATEGIES.

GROUP BUSINESSES WHICH DO NOT MEET THE STRATEGIC OBJECTIVES AND INVESTMENT
CRITERIA WILL CONTINUE TO BE DEVELOPED IN A MANNER THAT MAXIMISES THEIR
LONG-TERM VALUE WITH PLANS FOR APPROPRIATE DIVESTMENT. PROCEEDS FROM THESE
TRANSACTIONS WILL BE REINVESTED INTO GROWTH OPPORTUNITIES, BOTH LOCAL AND
OFFSHORE, THAT FORM PART OF THE GROUP'S CORE BUSINESS.
3. ALLOY WHEELS INTERNATIONAL LIMITED ("AWI")

AGAINST THE BACKGROUND OF M&R'S STRATEGIC OBJECTIVES, THE BOARD HAS DECIDED
THAT THE AWI ACTIVITIES ARE NOT A CORE BUSINESS.

ALTHOUGH CONSIDERABLE PROGRESS HAS BEEN MADE IN IMPROVING THE OPERATING
PERFORMANCE OF AWI IN RECENT MONTHS, IT IS APPARENT THAT THIS BUSINESS NEEDS
FURTHER EXPANSION TO BECOME A LEADER IN ITS MARKET. IN THIS REGARD, DEUTSCHE
MORGAN GRENFELL HAS BEEN SPECIFICALLY APPOINTED TO ADVISE M&R ON THE MOST
APPROPRIATE EXIT STRATEGY WHICH SHOULD, AT THE SAME TIME, ENHANCE THE PROSPECTS
OF AWI.
4. UNITRANS LIMITED ("UNITRANS")

AS NOTED IN THE 1998 CHAIRMAN'S STATEMENT, IT IS THE GROUP'S INTENTION TO
DEVELOP MURRAY & ROBERTS LIMITED AND UNITRANS RELATIVELY INDEPENDENTLY. THIS
STRATEGY WILL CONTINUE IN THE SHORT TO MEDIUM TERM WITH A PROBABLE SEPARATION
AT THE APPROPRIATE TIME AND IN A MANNER THAT WOULD BE IN THE BEST INTERESTS OF
ALL STAKEHOLDERS, INCLUDING A POSSIBLE UNBUNDLING.
5. CURRENT TRADING AND PROSPECTS

SHAREHOLDERS ARE REFERRED TO THE PROFIT WARNING DATED 14 DECEMBER 1998. DESPITE
A SATISFACTORY PERFORMANCE FROM UNITRANS AND MOST OF THE CORE OPERATIONS OF
MURRAY & ROBERTS LIMITED, THE GROUP WILL REPORT A HEADLINE LOSS FOR THE SIX
MONTHS TO 31 DECEMBER 1998. ALTHOUGH DIFFICULT MARKET CONDITIONS ARE LIKELY TO
PERSIST, THE TRADING RESULTS ARE EXPECTED TO BE MUCH IMPROVED IN THE SECOND
HALF OF THE FINANCIAL YEAR. FURTHER COMMENTS ON THE CURRENT YEAR'S PROSPECTS
WILL BE SET OUT IN THE GROUP'S INTERIM RESULTS ANNOUNCEMENT DUE FOR PUBLICATION
ON 25 FEBRUARY 1999.

NOTWITHSTANDING THE POOR FINANCIAL RESULTS ACHIEVED IN THE FIRST HALF, THE
GROUP HAS MADE PROGRESS WITH ITS RESTRUCTURING PLAN AND FURTHER SIGNIFICANT
DEVELOPMENTS ARE ANTICIPATED IN THE NEXT TWELVE TO EIGHTEEN MONTHS IN TERMS OF
THE STRATEGY SET OUT ABOVE.

IN VIEW OF THE STRONG BALANCE SHEET AND THE ANTICIPATED PROCEEDS FROM

DISPOSALS, THE GROUP WILL BE IN A POSITION TO DECLARE AN INTERIM DIVIDEND. THE
BOARD'S DECISION IN THIS REGARD WILL BE INCLUDED IN THE INTERIM RESULTS
ANNOUNCEMENT.
6. FURTHER CAUTIONARY ANNOUNCEMENT

IN THE LIGHT OF THE ENVISAGED RESTRUCTURING AS REFERRED TO ABOVE, SHAREHOLDERS
ARE ADVISED TO CONTINUE TO EXERCISE CAUTION WHEN DEALING IN THEIR M&R SHARES
UNTIL FURTHER ANNOUNCEMENTS ARE MADE.
BY ORDER OF THE BOARD

L J LINDSAY                                   BEDFORDVIEW

SECRETARY                                     28 JANUARY 1999
CORPORATE ADVISER
DEUTSCHE MORGAN GRENFELL (SA) (PROPRIETARY)LIMITED
(REGISTRATION NO. 95/11798/07)
JOINT SPONSORING BROKERS
MERRILL LYNCH
SMITH BORKUM HARE
MERRILL LYNCH SOUTH AFRICA (PTY)LTD
REGISTRATION NO. 95/01805/07
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
FLEMING MARTIN SECURITIES LTD
REGISTRATION NUMBER 95/11815/06
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE