South Africa’s M&R exits infrastructure sector with $23 million sale

JOHANNESBURG (Capital Markets in Africa) – South Africa’s Murray and Roberts (M&R) has sold its infrastructure and building business for 314 million rand ($23 million) as part of its drive to focus on projects for the global natural resources sector, it said on Tuesday.

The engineering and construction group said in a statement it sold the business to Firefly Investments, which represents a consortium led by Southern Palace Group of Companies Proprietary Limited, a black-owned industrial group.

M&R, which is transforming from being predominantly a South African building company to an international engineering group, said it would use the money to reduce its level of debt.

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,” said Group Chief Executive Henry Laas.

“This transaction is about Murray & Roberts exiting a specific market sector,” he added.

M&R will be selling the entire issued ordinary share capital of Concor, M&R’s wholly owned subsidiary, together with all claims held against Concor, to Firefly Investments, it said.

On Oct. 24, M&R sold Genrec, its only remaining manufacturing business, to Nisela Capital for 185 million rand.

M&R first announced its intention to sell its infrastructure unit in August when it also said it would look at selling Genrec.

South Africa’s construction industry has slowed sharply as government contracts, which big companies depend on, stall and weak commodity prices hit demand from the mining industry.

Source: Reuters Africa News