Murray & Roberts Holdings Ltd. (MUR), South Africa’s second-biggest construction company, said it would offer 112.8 million shares in a rights offer to cut debt and fund expansion.
Shareholders will be offered 34 shares for every 100 held at 18 rand each, Johannesburg-based Murray & Roberts said in a statement today. The 2 billion rand ($266 million) raised from the sale will help restore profit “as soon as practically possible,” Murray & Roberts said Jan. 31.
“This offer is at a massive discount and shows how difficult it has been for the company to raise money,” David Shapiro, a director at Johannesburg-based Sasfin Securities, said by phone. “It needed this offer to be a success.”
Murray & Roberts posted a loss of 528 million rand in the fiscal first half through December. Last year it resolved not to pay dividends until liquidity improves following a slowdown in South African spending on infrastructure and unresolved claims with projects in its home market and Dubai. Murray & Roberts, which helped build the Gautrain rapid-rail network that links Johannesburg and Pretoria, also has operations in Australia.
The stock rose 2.4 percent to 28.40 rand at the close in Johannesburg. Murray & Roberts has climbed 11 percent this year, in line with the FTSE/JSE Africa Construction & Building Materials (JCBDM) index.
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