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Engineering and construction group Murray & Roberts (M&R) has agreed to sell its 50% stake in Bombela Concession Company, the operator of Gautrain, for R1.38 billion. The sale to Amsterdam-headquartered infrastructure group Intertoll comes amid disruptions to its order book and cash flows.
The sale agreement covers a 33% in Bombela held by M&R, as well as a 17% stake held by the M&R BCC Financing Company, with the transaction still needing approval from shareholders.
Bombela was appointed by the Gauteng provincial government in 2006 to design, build, operate, maintain and partially finance the Gautrain project, which is a public-private partnership that includes a 15-year contract for the maintenance and operation of the Gautrain rapid rail system. Intertoll invests in motorway concessions and an independent toll and motorway infrastructure designer and developer, as well as providing other related services.
In its year to end-June, M&R had flagged the potential sale of Bombela. It said then it was pleased with a R59.5 billion order book, down only slightly year on year, but near orders had surged to R60.4 billion from R11.1 billion.
This was pushing up requirements for working capital, it said, while certain payments for projects were delayed as they progressed slower than planned, due to continued supply-chain disruptions.
This, together with escalating inflation, hit cash generation, with the firm reporting net debt position of R1.1 billion to end-June, having had a R700 million cash pile in the prior year.