Africa-Press – South-Africa. Specialist engineering and construction firm Murray & Roberts (M&R) said on Wednesday its Australian subsidiary Clough had exited voluntary business administration – a form of business rescue – with Milan-based Webuild taking control on Thursday.
A planned R4 billion sale of Clough to Webuild fell through in November, after failure to get agreement on an interim loan facility, but now Webuild has received the assets it was looking for, though it this came from a sign off from the business administrators, rather than being sold directly by M&R.
M&R will not receive proceeds from the sale, due to a “large deficit” in the creditors trust – referring to a separate legal entity in which creditor’s claims are kept – with M&R losing its investment value in Clough.
In 2022, M&R had warned of a crash crunch at the subsidiary, with global supply chain delays causing project delays, with the working capital needs of Clough being “urgent”.
M&R first acquired a minority interest in Clough in 2004 before buying out all the other minority shareholders in 2013. Clough accounted for 62% of the group’s R59.5 billion order book in financial year 2022, along with 57% of its R29 billion in revenue.
M&R’s holding company in Australia is still under administration and it is the group’s expectation that there should be more clarity on the outcome of the voluntary administration during March 2023, M&R said on Wednesday. The holding company’s only other asset was RUC Cementation, which was part of the group’s mining business platform, with a net asset value of about R1 billion, M&R said previously.
The group said on Wednesday that it continues to explore options to retain ownership of RUC.
The final acquisition for Webuild comprises Clough’s organisation, offices, trademarks, credentials, business references, senior management, and office personnel and more than AUD$6 billion (R74.8 billion) worth of projects in backlog, as of 2022.
Peter Bennett, Clough CEO and MD, said in a statement: “This is a fantastic outcome for the continued growth of Clough, and I would like to sincerely thank every employee for their hard work, patience, and commitment over the last few months.
“We will now be better positioned than ever to deliver our diverse and significant pipeline, to continue pursuing the innovative and challenging projects our strong history has been built upon, and most importantly, to continue providing solutions to our clients and opportunities to our employees and the community at large. Together we are stronger.”
M&R’s shares had risen 11.5% on Wednesday, but has given back these gains, trading lower on Friday than it was before the announcement was made. The shares have fallen by almost 77% over the past six months.
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