M&R agrees to sell interest in Australian mining firm for A$1

A wholly owned subsidiary of the specialist engineering group Murray & Roberts (M&R), has entered into an agreement to sell its Australian mining technology company Insig Technologies to the Perth-based AvidSys Group (AVID).

“Insig requires further investment to support its growth trajectory, which AVID will provide and Murray & Roberts’ multinational mining platform will continue to make use of services provided by Insig,” the company, valued at R489m on the JSE, said on Monday.

According to the agreement, the subsidiary — M&R UK — will sell its 65% stake for A$1 (R12.16), but AVID will take on Insig’s liabilities of A$7m (R75.4m).

Insig offers mine automation services and provides software and personnel tracking, among other things.

Avid is an international group based in Perth and operates in several sectors, including metals and mining.

“The acquisition supports its strategy to develop a vertically and horizontally integrated business with investments in mining, raw material processing, construction, mining services, renewable energy — green hydrogen and infrastructure development,” according to a statement.

As of the end of February, Insig had a net asset value of A$2.9m, and has made a loss of A$1.7m in the eight months so far of the 2023 financial year.

M&R operates in several regions and has global expertise in shaft sinking, tunnelling, raise drilling, engineering, design and contract mining.

But it recently saw its debt pile up and CEO Henry Laas said earlier in March that it was considering a capital raise as a possible option to reduce the amount of R800m.

M&R’s corporate debt of R1.8bn in December was cut down after selling off its 50% share in Bombela Concession Company, which is involved with the Gautrain, to Intertoll International Holdings.

Clough, which held the energy, resources and infrastructure business unit, and RUC, which was part of the group’s mining business, are also no longer part of the group after a voluntary administration process was instituted in 2022.

Those companies were subsequently spun off from the group with effect from December 5 last year, a move that reduced group equity from R5.7bn to R2.2bn.