Murray & Roberts Shareholders Face Total Loss as Mining Assets Sold in Business Rescue

Murray & Roberts Holdings Limited (JSE: MUR), once a cornerstone of South Africa’s construction and engineering sector, has confirmed the sale of its core mining assets as part of a business rescue plan – a move that will leave public shareholders empty-handed.

In a statement released this week, the company announced that The Cementation Company (Africa) and Murray & Roberts United Kingdom will be sold to a consortium. This follows a 99.7% vote in favor of the business rescue plan by creditors on Monday.

The reality for shareholders? Their investments have been wiped out.

The End of the Road for Shareholders

For those holding shares in Murray & Roberts Holdings Limited, the implications are severe. According to the business rescue plan, the proceeds from the asset sales won’t even cover all creditor claims. That means shareholders – who rank below creditors – won’t receive a cent.

The board now intends to recommend a creditors’ voluntary winding up of the company, effectively dissolving the listed entity. Shareholders should brace for the complete loss of their investment, as Murray & Roberts is expected to become commercially insolvent.

Timeline and Next Steps

Although exact dates haven’t been confirmed, the implementation of the business rescue plan is set to begin immediately. The process includes the sale of key assets, suspension of certain contracts, and maintaining the moratorium on legal proceedings against the operating entity, Murray & Roberts Limited (MRL).

Once the asset sales are finalised and creditors are paid what can be recovered, the board will proceed with winding up the company.

The Collapse Explained

This outcome is the final chapter in a steep decline for a company that once played a central role in South Africa’s infrastructure growth, especially in the lead-up to the 2010 FIFA World Cup.

The unraveling began in November 2024 when De Beers significantly downsized a key contract with Murray & Roberts Cementation. That single contract made up over 50% of the division’s revenue, and its loss created an immediate liquidity crisis.

Shortly afterward, Murray & Roberts Limited and its subsidiaries were placed under business rescue. Despite having reduced its debt from R2-billion to R409-million by mid-2024, the company couldn’t recover from the shock.

The unaudited interim results for the period ending 31 December 2024 paint a grim picture:

• A R646-million loss from continuing operations

• A 30.9% drop in revenue for discontinued operations

• A total attributable loss of R1.385-billion

• Shareholders’ equity turned negative at R647-million

What Shareholders Can Do

If you’re a shareholder, here’s what you should know:

• Your shares are likely worthless.

• The company will likely be wound up soon.

• There’s no recovery mechanism – shareholders come last in insolvency.

• Tax relief may be possible. Consult a tax professional about claiming a capital loss.

A Tough Lesson for Investors

This case serves as a cautionary tale for equity investors, especially in volatile sectors like construction and mining. Despite signs of recovery in early 2024, a single contract loss spiraled into a full-blown financial collapse.

For long-term investors in Murray & Roberts, the journey has ended not with a return, but a lesson in how quickly fortunes can change in a high-risk industry.

{Source: Daily Maverick}

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