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MUR - Murray & Roberts Holdings Limited - Declaration information relating to a

Release Date: 01/03/2012 10:11
Code(s): MUR
Wrap Text

MUR - Murray & Roberts Holdings Limited - Declaration information relating to a renounceable rights offer of approximately R2 billion and further cautionary announcement NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN AND HONG KONG Murray & Roberts Holdings Limited (Incorporated in the Republic of South Africa) Registration number: 1948/029826/06 JSE Code: MUR ISIN: ZAE000073441 ("Murray & Roberts" or "Group" or "Company") DECLARATION INFORMATION RELATING TO A RENOUNCEABLE RIGHTS OFFER OF APPROXIMATELY R2 BILLION AND FURTHER CAUTIONARY ANNOUNCEMENT 1 INTRODUCTION Shareholders of Murray & Roberts ("Shareholders") are referred to the announcement by Murray & Roberts released on the Securities Exchange News Service ("SENS") of the JSE Limited ("JSE") on Tuesday, 31 January 2012 and published in the South African press on Wednesday, 1 February 2012, regarding the notice of general meeting, which notice was posted to Shareholders on Tuesday, 31 January 2012 ("Notice"). Shareholders are further referred to the announcement released on SENS on Wednesday, 29 February 2012 regarding the approval by the requisite majority of Shareholders of all the resolutions proposed at the general meeting. The board of directors of Murray & Roberts ("Board") is pleased to announce that the Company intends to raise approximately R2 billion through a renounceable rights offer ("Rights Offer"), subject to the satisfaction of the conditions precedent set out in paragraph 3 below. It is the Company`s intention to have the Rights Offer fully underwritten subject to customary terms and conditions to be contained in an underwriting agreement, which is expected to be entered into at the time of the launch of the Rights Offer. In furtherance of this intention, the Company has appointed J.P. Morgan Securities Ltd ("J.P. Morgan") and The Standard Bank of South Africa Limited ("Standard Bank") as Joint Global Coordinators and Joint Bookrunners for the Rights Offer. 2 RATIONALE AND APPLICATION OF PROCEEDS Subsequent to the October 2008 global financial crisis, and in particular since early 2010, Murray & Roberts` business environment has been impacted by the weakening of the global economy and the slowdown in South African public spending on infrastructure. These factors, together with the challenges experienced on three of the Group`s projects namely, Dubai International Airport, Gautrain Rapid Rail Link and the Gorgon Pioneer Materials Offloading Facility, which resulted in unresolved claims, caused Murray & Roberts to end the 2011 financial year in a weakened financial position. As a result, managing short-term liquidity has been a key focus for the Group in recent months given the protracted nature of major claims resolution processes and timing of anticipated proceeds from claim settlements in respect of the abovementioned three projects. To date, the Group has recognised as uncertified revenues a cumulative amount of approximately R2,2 billion of these and other claims. This is marginally up from the R2,0 billion previously reported, primarily due to foreign exchange movements. The Group`s uncertified revenues are significantly lower than the estimated value of its claims and variation orders. In order to improve the Group`s liquidity, Murray & Roberts successfully completed the restructuring of its South African term debt and bank facilities during November 2011. This restructuring improves alignment between the Group`s debt repayment tenure and the timing of anticipated proceeds to be derived from the settlement of the three major unresolved claims. Notwithstanding the Board`s expectation that the term debt and bank facilities will meet the Group`s expected liquidity requirements over the short and medium term, the Board intends to implement the Rights Offer which should allow the Group to withstand the impact of current uncertain global economic and financial markets. The Board is of the view that the Rights Offer represents the best opportunity for the Group to retain strategic flexibility and to preserve and grow long-term Shareholder value. Specifically, the successful completion of the Rights Offer should give the Group sufficient flexibility to: a) benefit from reduced overall debt levels and increased headroom under its banking facilities. The expected net proceeds from the Rights Offer will be deployed, in whole or in part, to reduce the Group`s debt. The Board believes that this strengthening of the Group`s overall financial position will provide additional support to its recovery and growth plan; and b) fund the Group`s order book and enable the Group to continue with its growth strategy. Notwithstanding the current economic environment, the Group`s order book, secured at an acceptable margin, increased to R57 billion at 31 December 2011. The Board believes that the remaining expected net proceeds (if any) may be deployed to deliver the projects in the Group`s order book and provide greater flexibility to invest in core businesses to enhance its market positions, while pursuing potential growth opportunities in sub-Saharan Africa and Western Australia. 3 CONDITIONS PRECEDENT The implementation of the Rights Offer is subject to the fulfilment of the following conditions precedent: * the filing of the special resolutions approved at the general meeting of Shareholders held on Wednesday, 29 February 2012 with the Companies and Intellectual Property Commission ("Commission"), and the registration of these resolutions by the Commission, to the extent applicable; * approval by the JSE of the circular relating to the Rights Offer (to be posted in due course) ("Rights Offer Circular"); * approval by the JSE of the application for the listing of the letters of allocation envisaged in terms of the Rights Offer and of the application for listing of any Rights Offer shares required for implementation of the Rights Offer; and * any other relevant approvals required by the JSE. 4 RENEWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are advised that the final terms, pro forma financial effects and salient dates and times of the Rights Offer will be announced in due course. Shareholders are accordingly advised to continue to exercise caution when dealing in the Company`s securities until a further announcement regarding the Rights Offer is made. Bedfordview 1 March 2012 Joint Global Coordinator and Joint Global Coordinator, Joint Joint Bookrunner Bookrunner and Transaction JP Morgan Sponsor Standard Bank
Lead Independent Sponsor Independent reporting Deutsche Securities (SA) (Pty) Ltd accountantsDeloitte & Touche South African legal advisors to the Legal advisors to the Company as to Company US and English law Webber Wentzel Linklaters LLP South African legal advisors to the Legal advisors to the Joint Global Joint Global Coordinators Coordinators as to US and Werksmans English law Latham & Watkins (London) LLP NOTICE TO RECIPIENTS The distribution of this announcement in certain jurisdictions may be restricted. This announcement does not constitute an offer of, or an invitation to purchase, any securities of the Company in any jurisdiction. This announcement includes certain "forward-looking statements" that reflect the current views or expectations of the Board with respect to future events and financial and operational performance. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: the Group`s strategy; the economic outlook for the industry; use of the proceeds of the Rights Offer; and the Group`s liquidity and capital resources and expenditure. These forward-looking statements are not based on historical facts, but rather reflect the Group`s current plans, estimates, projections and expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as "believe", "expect", "anticipate", "intend", "should", "planned", "may", "potential" or similar words and phrases. This announcement is not an offer for the sale of securities. The securities discussed herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States absent an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Company does not intend to register any part of the Rights Offer in the United States. J.P. Morgan and Standard Bank are acting exclusively for the Company and no one else in connection with the Rights Offer. They will not regard any other person (whether or not a recipient of this announcement) as their respective clients in relation to the Rights Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for giving advice in relation to the Rights Offer or any transaction or arrangement referred to herein. No representation or warranty, express or implied, is made by J.P. Morgan and Standard Bank as to the accuracy, completeness or verification of the information set forth in this announcement, and nothing contained in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. J.P. Morgan and Standard Bank assume no responsibility for its accuracy, completeness or verification and, accordingly, disclaim, to the fullest extent permitted by applicable law, any and all liability which they might otherwise be found to have in respect of this announcement or any such statement. Date: 01/03/2012 10:11:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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