Murray & Roberts’ (M&R) share price fell 13% to R4.18 yesterday after it said its Australian subsidiary Clough was put under voluntary administration after a deal to sell it fell through.
M&R had planned to sell Clough, the Australia-based construction and engineering group, to Italian company Webuild, with the deal also contemplating an A$80 million (R935m) interim loan facility to be injected into Clough by Webuild to avoid placing Clough under voluntary administration in Australia.
However, M&R said yesterday the date in the sale and purchase agreement to implement the loan had passed, the parties agreed there was no prospect of the loan being put in place and thus the transaction could not proceed.
The transaction had been necessary because of Clough’s “increasingly urgent working capital needs”.
“Other than the group’s interest in RUC Cementation, as well as a guarantee provided to Clough USA in the amount of A$3m the group has no residual exposure in Australia or to Clough, and will not be affected by MRPL (Murray & Roberts Pty Ltd) being placed into voluntary administration,” M&R said in a statement yesterday.
MRPL is an indirect wholly-owned subsidiary of the group and the group’s holding company in Australia, and it too would be placed into voluntary administration, given an inter-company loan account with Clough. The loan account arose through the buy-out of the minority shareholders of Clough by M&R in 2013. RUC Cementation, part of the group’s mining business platform, is the only other asset of MRPL.
Webuild and Clough have been building the Snowy 2.0 hydropower project in a joint venture and are also working together on sections of Australia’s Inland Rail project. Snowy 2.0 has been beset by delays and rising costs.
BUSINESS REPORT