Murray & Roberts has agreed to sell its stake in Gautrain for R1.38 billion

Murray & Roberts (M&R), an engineering and construction firm, has agreed to sell its 50% stake in Bombela Concession Company, the operator of Gautrain, for R1.38 billion. The sale to Intertoll, based in Amsterdam, comes amid disruptions to its order book and cash flows.

The agreement covers a 33% stake in Bombela held by M&R as well as a 17% stake held by the M&R BCC Financing Company, with shareholder approval still required.

The Gauteng provincial government appointed Bombela 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 highway concessions and operates as an independent toll and highway infrastructure designer and developer, in addition to offering other related services.

M&R had hinted at the possibility of selling Bombela in its fiscal year ending in June. It stated at the time that it was pleased with an R59.5 billion order book, which was down slightly year on year, but that near orders had increased to R60.4 billion from R11.1 billion.

This was increasing the need for working capital, it said, while certain payments for projects were delayed because they were moving slower than expected due to ongoing supply-chain disruptions.

This, combined with rising inflation, hampered cash generation, with the company reporting a net debt position of R1.1 billion at the end of June, down from a cash pile of R700 million the previous year.