Specialist engineering and contracting group Murray & Roberts’ (M&R’s) wholly-owned subsidiary M&R Limited (MRL) has entered into a sale and purchase agreement with Intertoll International Holdings or its nominee entity to dispose of its entire interest in the Bombela Concession Company (BCC) for up to R1.4-billion.
In terms of the sale and purchase agreement, MRL will dispose of 3.3-million ordinary shares in BCC, constituting 33% of the entire issued ordinary share capital of BCC; and all of the issued ordinary shares in M&R BCC Financing Company – the sole shareholder of M&R BCC Holdco Company which, in turn, holds 1.7-million ordinary shares in BCC, constituting 17% of the entire issued ordinary share capital of BCC – for a total purchase consideration of up to R1.4-billion.
Intertoll is headquartered in Amsterdam, Netherlands. It is an investor in motorway concessions and an independent toll and motorway infrastructure designer and developer, concessionaire, equipment supplier, asset manager and provider of specialist consultancy services catering to the transportation and infrastructure sectors in Europe.
BCC was appointed by the Gauteng provincial government (GPG) to design, build, operate, maintain and partially finance the Gautrain rapid-rail project – a public-private partnership that includes a 15-year contract for the maintenance and operation of the Gautrain system.
BCC implements its obligations through diverse contractual relationships with the primary contract being the concession agreement between the GPG and BCC.
M&R explained in its stakeholder report for the financial year ended June 30, that delivery of its order book was increasingly being disrupted and that increased levels of working capital were required to address the dislocation in project cash flows.
The proceeds from the proposed transaction will be used to reduce debt in South Africa and will assist the group in addressing its working capital needs. The group’s investment in BCC is not strategic and the concession is also set to terminate in 2026.
The implementation of the proposed transaction remains subject to the fulfilment and/or waiver of various suspensive conditions.
The parties are targeting implementation of the proposed transaction in the first quarter of 2023, subject to the fulfilment of the suspensive conditions.
Approval by shareholders is required by way of an ordinary resolution.
The fair value of the company’s effective interest in BCC recorded in its yearly financial statements at June 30, 2022 amounted to R1.4-billion.