Specialist engineering and construction group Murray & Roberts (M&R) has stumbled in its quest to regain control of its Australian asset, RUC Cementation Mining Contractors after failing to ensure that certain conditions precedent in the deed of company arrangement (Doca) proposal to creditors were met on time.
The bid to regain control of RUC, which it lost after its holding company in Australia, MRPL and Clough were placed into voluntary administration, a form of business rescue, was meant to re-establish the full scale and capability of M&R’s core multinational mining platform.
“Notice was received on 3 July 2023 from the administrators of Murray & Roberts Pty Ltd (MRPL), that certain conditions precedent in the Doca term sheet has not been satisfied before the transaction end date,” M&R said in a statement on Tuesday.
“As a result, the administrators have notified Cementation APAC Pty Ltd that the Doca term sheet has terminated.”
In March M&R said it and its Australian subsidiary, and administrators, Deloitte Australia, had entered into a binding arrangement which could cause it to regain control of RUC. Cementation APAC, a new Australian-registered entity and a subsidiary of M&R UK, had been established and accepted as replacing MRPL as a proponent under the proposed Doca.
Had the situation panned out as planned, control of MRPL and RUC would revert to M&R with MRPL becoming a subsidiary of Cementation APAC. M&R would regain the full scale and capability of the group’s core multinational mining platform.
“The offer MUR was willing to make was not going to be accepted by the MRPL creditors,” Chronux Research analyst Rowan Goeller told Business Day. He said now that M&R had lost the exclusive right to negotiate with the administrator the next step is that the process opens up to other parties.
“MUR can still participate but they had mentioned they will not overpay to regain the assets, so at present chances seem low that they will be successful,” Goeller said. “Plan B is to operate in the region with a new entity and rebuild their presence.”
On Tuesday the group said Cementation APAC will now be developed by the group with the intention of providing engineering and contracting services to mining clients in the Asia Pacific region. The loss of RUC means that the group’s mining platform comprises only two regional businesses in Africa and the Americas, which had combined orders worth R14bn at the end of last year.
M&R shares fell 6.06% to R0.93 by midmorning on Tuesday.
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