Wrap Text
Disposal of the Murray & Roberts Infrastructure & Building Platform and Withdrawal of Cautionary Announcement
Murray & Roberts Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1948/029826/06
JSE Share Code: MUR
ADR Code: MURZY
ISIN: ZAE000073441
("Murray & Roberts" or “the Company”)
DISPOSAL OF THE MURRAY & ROBERTS INFRASTRUCTURE & BUILDING PLATFORM AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcements released on the Stock Exchange News Service of the JSE
Limited (“JSE”) ("SENS") on 20 July 2016, 24 August 2016 and 12 October 2016, Murray & Roberts
shareholders ("Shareholders") are advised that Murray & Roberts Limited, a wholly owned subsidiary
of the Company, ("MRL") has entered into an agreement with, amongst others, Firefly Investments
319 Proprietary Limited (“Firefly Investments”), a newly incorporated entity, in terms of which Firefly
Investments will purchase from MRL, the business operated by MRL under the name and style of the
Murray & Roberts Infrastructure & Building Platform (which comprises of a number of separate
businesses or divisions) (collectively referred to as “MRIB”) (“the Transaction”). As at the closing date
of the Transaction, MRIB will be owned by Concor Proprietary Limited ("Concor"), a wholly owned
subsidiary of MRL. The Transaction will accordingly be implemented by way of MRL disposing of the
entire issued ordinary share capital of Concor, together with all claims held against Concor, to Firefly
Investments. Firefly Investments represents a consortium led by Southern Palace Group of
Companies Proprietary Limited (“Southern Palace”), a black-owned industrial group, and which also
includes the Government Employees Pension Fund (a fund established in terms of the Government
Service Pension Act, 1973) ("GEPF") acting through its authorised agent, Public Investment
Corporation SOC Limited ("PIC") and certain members of current MRIB management as
shareholders. The Transaction excludes the Murray & Roberts group of companies' ("the Group")
interests in the Bombela Concession Company, Bombela Civils Joint Venture, Bombela Operating
Company and the Murray & Roberts Middle East operations. It also excludes liabilities for certain
contracts including liabilities relating to the Grayston Pedestrian Bridge temporary works collapse, as
well as the opencast mining contract with Lonmin Plc.
2. Rationale for the Transaction
Murray & Roberts’ strategic future plan is to be a leading, diversified project engineering, procurement
and construction group in selected natural resource sectors.
1
Murray & Roberts aims to:
1. Expand its specialist engineering capabilities into all project lifecycle segments to offer more
complete project solutions to clients;
2. Grow commissioning, brownfields and operations & maintenance capabilities; and
3. Invest in selected project development opportunities.
The Company’s vision for the Group is to strive, by 2025, to be a leading multinational group that
applies its project lifecycle capabilities to optimise fixed capital investment.
Rationale for the disposal of MRIB
The Group
The decision to dispose of MRIB supports the Group’s long-term strategy to focus its business on the
global natural resources markets, and follows an extended period of careful planning and
consideration.
The three key drivers supporting the Group’s strategy to focus on the natural resources market
sectors are: global economic growth, global population growth, and continued urbanisation, which
provide the basis for sustainable growth in the natural resources markets over the long term. The
disposal of MRIB will allow the Group to become a focused project solutions service provider in
selected natural resources market sectors.
The strategic review revealed that the sale of MRIB to a black-owned and controlled industrial group,
would create a large infrastructure and building business that may be highly successful in the sub-
Saharan African construction market.
MRIB
MRIB, drawing on the extensive expertise of its various operations and employees, has extensive
experience and a long track record in infrastructure and building projects.
The Transaction is the first of its kind to effect essential transformation by establishing a large black-
owned and controlled infrastructure and building business.
The Transaction will create a black-owned, leading, infrastructure and building business, comprising
the following divisions:
- Infrastructure, which comprises roads, earthworks and civils;
- Opencast mining;
- Power; and
- Buildings, which comprises commercial and residential buildings.
3. Disposal consideration and value of the net assets (and profits attributable thereto) of MRIB
MRL will dispose of its shares in and claims against Concor to Firefly Investments for an aggregate
disposal consideration of R314 million (which consideration is calculated with reference to the net
asset value ("NAV") of MRIB as at the closing date of the Transaction), to be settled in cash on the
closing date, which is expected to be the last business day of the month in which all conditions
precedent to the Transaction are fulfilled or waived (as applicable). The NAV of MRIB at 30 June
2016, prior to Transaction related adjustments, was R231 million and the loss after tax attributable to
the net assets of MRIB for the year ended 30 June 2016 was R18 million. MRL will however, procure
2
that the NAV of MRIB as at the closing date of the Transaction be adjusted such that it equals
R314 million, either through a dividend or a cash enhancement.
4. Use of proceeds
The disposal consideration will be applied to reduce the level of debt in the Company.
5. Nature of the business of MRIB
MRIB is a diversified infrastructure and building business, comprising eight businesses or divisions: (i)
civil engineering, (ii) general building, (iii) opencast mining, (iv) road and earthworks, (v) the Group's
interests in the Medupi Civil joint venture, (vi) construction plant and equipment, (vii) property and
project developments and (viii) an equity interest in Dynamic Concrete Solutions Proprietary Limited,
a Namibian-based readymix concrete supplier.
6. Categorisation and related party transaction
The Transaction is categorized as a Category 2 transaction pursuant to section 9 of the JSE Listings
Requirements (“Listings Requirements”). The GEPF is currently the registered holder of a 15.24%
shareholding in the Company and will, at the closing date of the Transaction, through the PIC, be a
shareholder in Firefly Investments with a shareholding of 25%. The JSE has exercised its discretion
under section 10.1 of the Listings Requirements to require that the Transaction be treated as a
related party transaction (as defined in section 10.1 of the Listings Requirements). Accordingly, the
Company's board of directors has appointed BDO Corporate Finance Proprietary Limited to act as the
independent expert (“the Independent Expert”) to report on the Transaction and, specifically, to opine
on whether the terms of the Transaction are fair to Shareholders.
7. Conditions precedent to the Transaction
The Transaction is subject to the fulfilment and/or waiver of a number of conditions precedent,
including amongst others:
- Firefly Investments, MRL, Murray & Roberts SADC Proprietary Limited, Murray & Roberts
Construction Proprietary Limited ("Murray & Roberts Construction") and Southern Palace
obtaining the necessary shareholder and boards of director approvals and resolutions for the
Transaction;
- Firefly Investments and MRL entering into a transitional services agreement governing the
provision of certain ongoing services between the parties;
- pursuant to section 10.4 of the Listings Requirements, Shareholders approving the Transaction,
by way of an ordinary resolution, which would exclude the votes of the GEPF and its associates;
- execution by Firefly Investments of all requisite funding agreements with the GEPF as are
required for the Transaction and these agreements becoming unconditional;
- the Takeover Regulation Panel either issuing a compliance certificate or granting an exemption
in respect of the sale of shares in Forum SA Trading 284 Proprietary Limited (“Forum SA”)
("Forum SA shares") by MRL to Murray & Roberts Construction, which forms a preliminary intra-
group restructuring step preceding the implementation the Transaction;
- each of the minority shareholders in Forum SA waiving (i) any pre-emptive right, right of first
refusal or option (as applicable) which it may hold in respect of the Forum SA shares, and (ii) to
the extent applicable, any requirement that Murray & Roberts Construction needs to make a
mandatory offer to acquire the remaining shares in Forum SA from such minorities;
3
- consent being obtained from the counterparties to certain specified contracts with MRL (or other
entities within the Group other than those forming part of MRIB) for such contracts to be ceded
and assigned to Firefly Investments;
- certain key members of management of MRIB entering into new employment contracts with
Firefly Investments in relation to their employment in respect of MRIB after the closing date;
- MRL delivering to Firefly Investments a legal opinion prepared by its legal adviser that (i) sets
out the restructuring steps that were undertaken by the Group for the purpose of placing the
entire MRIB under control of Concor and (ii) confirms that such restructuring process will not
result in any adverse tax consequences for any of the entities forming part of MRIB;
- MRL and all other entities forming part of the Group (other than those forming part of MRIB) are
released by the relevant counterparty from each of the guarantees and other security
arrangements which have been given for the benefit of MRIB;
- the Construction Industry Development Board ("CIDB") established under the Construction
Industry Development Board Act, No. 38 of 2000, undertaking in writing not to (i) join Murray &
Roberts Construction or any entities forming part of MRIB in (a) any civil claims for damages or
related proceedings emanating from the Construction Fast Track Settlement Process
undertaken by the Competition Commission in February 2011 or (b) any review proceedings
which MRL has or may institute against the CIDB in respect thereof, or (ii) institute or bring any
proceedings of whatsoever nature against Murray & Roberts Construction or any entity forming
part of MRIB in respect of the aforementioned civil claims or review proceedings; and
- to the extent required, the Transaction has been unconditionally approved by the Competition
Authorities in terms of the Competition Act, No. 89 of 1998, as amended from time to time, or
conditionally approved on terms and conditions which each of MRL and Firefly Investments
confirms in writing to the other to be acceptable to it.
8. Circular to Shareholders
A circular, containing full details of the Transaction, attaching the opinion of the Independent Expert
and incorporating a notice convening a general meeting of Shareholders (“the General Meeting”) to
consider and, if deemed fit, to pass the resolutions necessary to approve and implement the
Transaction, will be issued to Shareholders in due course and Shareholders will accordingly be
advised of the salient dates and times relating to the General Meeting.
9. Withdrawal of cautionary announcement
Following publication of the terms of the Transaction in this announcement, Shareholders are no
longer required to exercise caution when dealing in their Murray & Roberts securities in connection
with the Transaction.
Bedfordview
1 November 2016
Financial Adviser to Murray & Roberts: Rand Merchant Bank (A division of FirstRand Bank Limited)
Sponsor to Murray & Roberts: Deutsche Securities (SA) Proprietary Limited
Legal Adviser to Murray & Roberts: Webber Wentzel
Independent Auditor and Reporting Accountant: Deloitte & Touche
4
Independent Expert: BDO Corporate Finance Proprietary Limited
Financial Adviser to Southern Palace: The Standard Bank of South Africa Limited
Legal Adviser to Southern Palace: Werksmans Attorneys
About Murray & Roberts
Murray & Roberts has a long and proud heritage of more than a century and is today recognised as a
multinational project lifecycle group. It’s the Company’s vision, by 2025, to be a leading multinational
group that applies its project lifecycle capabilities to optimise client’s fixed capital investment. The
Company achieves this by focusing its expertise and capacity on delivering sustainable and fit-for-
purpose project engineering, procurement, construction, commissioning, operations and maintenance
solutions.
The Company delivers its capabilities into three global market sectors: oil & gas; metals & minerals and
power & water.
Murray & Roberts is headquartered in Johannesburg, South Africa, and is listed on the JSE Limited. It
has offices in:
1. Africa:
a. South Africa, Mozambique, Zambia and Ghana
2. Australasia:
a. Australia and South Korea
3. Europe
a. Scotland
4. North America
a. USA and Canada
Murray & Roberts is a group of world-class companies and brands aligned to the same purpose and
vision, and guided by the same set of values.
More information is available at www.murrob.com
About Southern Palace Group
Southern Palace is a wholly black-owned and managed South African, diversified industrial holding
company established in 2002 with interests in numerous well-established businesses. Southern Palace
has built up a track record of successful investment transactions.
It has presence in steel products manufacturing and recycling, automotive trading and manufacturing, real
estate and technology and telecommunications. Some of our past and present investments include MAN
Truck and Bus Centurion, Thomas Tyres, Altech Fleetcall, Altech Alcom-Matomo, Altech Motorola Radio
Distribution, Scaw Metals Group, Teljoy Business Systems, Canvas and Tents Manufacturing,
Growthpoint Properties and Huawei Technologies Africa.
More information is available at www.southernpalace.co.za
5
Date: 01/11/2016 10:44:00 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.
Sharenet Sites 
