Clough parent Murray & Roberts plots low-key return as sale process unfolds
South African contractor Murray & Roberts is plotting a quiet return to its Australian mining services business despite the collapse of Clough.
South African contractor Murray & Roberts is plotting a quiet return to its Australian mining services business despite the collapse of Clough, registering a new company and approaching former staff in an apparent bid to keep trading despite the sale process for the business.
The bulk of Clough’s contracting business will go to Italy’s Webuild in a $35.6m deal set to be sent to creditors for approval this week.
But Deloitte’s administrators are also seeking to sell the group’s profitable mining services company, RUC Cementation, with bankers Houlihan Lokey kicking off the sales process for the business in early February.
RUC was never sent into administration, but all shares in the company are controlled by Australian-registered Murray & Roberts Pty Ltd, which is under the control of Deloitte, and owed Clough $346.9m at the end of June, the legacy of an initial $200m loan to buy the company in 2013.
It is understood Murray & Roberts Holdings, the ultimate parent company of the Clough group in South Africa, is a likely bidder for RUC.
But documents lodged with ASIC suggest it is preparing a fallback position if the cash-constrained company is not the successful buyer.
Deloitte was called in to Clough on December 5. Ten days later Murray & Roberts Holdings registered a new company, Cementation APAC.
The two directors are Michael Da Costa, Perth-based chief executive of Murray & Roberts Holdings’ broader mining services group and Murray & Roberts Holdings director Ian Henstock, also a former Clough director. Cementation APAC also lists Murray & Roberts Holdings as its sole shareholder.
Curiously, the registered office of the company is the same as that listed by RUC Cementation in its most recent accounts.
Industry sources say Mr Da Costa has already begun tapping RUC senior staff for the new venture, presumably in the hope of setting up in competition to any buyer of RUC if the South African’s bid is unsuccessful.
A spokesman for Murray & Roberts in South Africa declined to comment on the purpose of establishment of Cementation APAC, or on details of its operations so far, saying it was a “commercial-in-confidence” matter.
But he said Murray & Roberts retained a commitment to the Australian market.
“Murray & Roberts is committed to the Australian market, specifically the mining market, for the long term. We will continue to meet the needs of our Australian-domiciled and multinational clients and provide them with full access to the technical capability (especially vertical shaft design), international relationships and expertise of the Murray & Roberts mining platform,” he said. “For commercial-in-confidence reasons, we will not be providing any further detail on our Australian operations.”
RUC is a key niche player in the underground mining services sector, with a substantial mining and drilling business. It is also one of the few companies with extensive experience building shafts for underground mines. It has conducted work at IGO’s Odyseuss shaft in WA, as well as for Newmont at the Tanami gold mine in the Northern Territory, a held part of a joint venture involved in shaft work at Rio Tinto’s giant Oyu Tolgoi copper mine.
Deloitte’s advisers are understood to be looking for $100m to $200m for RUC, based on Australian and Asia-Pacific revenue of $347.3m for the 2022 financial year, and earnings before interest, tax, depreciation and amortisation of $37m and a $10.5m net profit.
Potential buyers were told in early February the company had an order book worth close to $500m, and had more than 1700 workers across its operations.
The move by South Africa’s Murray & Roberts to set up a potential competitor for its former subsidiary could complicate life significantly for Deloitte.
The sale of RUC is one of the few hopes its administrators have of realising any return on the $347m owed to the broader group by the South African parent company, given the debt trail appears to stop at the head Australian company in the group, Murray & Roberts Pty Ltd, also the owner of RUC.
Any threat to the value of RUC would undermine Deloitte’s attempts to yield any substantial value for creditors outside of the sale of Clough to Webuild.
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