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Cisco buyer’s identity not disclosed as M&R closes steel chapter

Source: Engineering News Date: 31 August 2012

Construction and engineering group Murray & Roberts (M&R) has confirmed that it has disposed of the Cape Town Iron and Steel Works (Cisco), in Kuilsrivier, in the Western Cape, for an undisclosed fee. But the JSE-listed group says it is restricted, through a confidentiality agreement, from disclosing the identity of the buyer.

It is understood that a Turkish family business with steel interests has purchased the facility, which produces long products. But Engineering News Online was unsuccessful in immediately confirming that information when calling Cisco.

M&R CEO Henry Laas said on Thursday that the disposals of three noncore steel businesses, of which Cisco was the largest unit, were concluded following the group’s year-end of June 30, 2012. Together, these business carried a book value of R436-million.

Commercial director Ian Henstock, who oversaw the disinvestment process, told Engineering News Online that the sale of Cisco had already been concluded and that the money had been paid over to M&R. It was not deemed necessary to seek approval for the transaction from the competition authorities.

The other two disposals related to BRC Mesh and Reinforcing Steel Contractors and were still subject to Competition Commission approval. The businesses were earmarked for sale to individuals who had past associations with M&R, including former M&R MD Malcolm McCulloch.

Cisco had been placed on care and maintenance in 2010 and M&R had continued paying the electricity account to ensure that power would be available to bring the facility back into operation.

“So while we weren’t making steel there, it is in a state where the switch can be flipped and it can begin producing,” Henstock said, adding that M&R was happy with the price received.

During the financial year, the group, which has been disinvesting from noncore businesses as part of a turnaround strategy, also disposed of its shareholding in Johnson Arabia, RSC Ekusasa Mining, Alert Steel Polokwane, Freyssinet Posten, BRC Arabia and Clough’s marine construction business.

Laas said all deals relating to the remaining steel businesses should be concluded at net book value over the coming 12 months.

Construction and engineering group Murray & Roberts (M&R) has confirmed that it has disposed of the Cape Town Iron and Steel Works (Cisco), in Kuilsrivier, in the Western Cape, for an undisclosed fee. But the JSE-listed group says it is restricted, through a confidentiality agreement, from disclosing the identity of the buyer.

It is understood that a Turkish family business with steel interests has purchased the facility, which produces long products. But Engineering News Online was unsuccessful in immediately confirming that information when calling Cisco.

M&R CEO Henry Laas said on Thursday that the disposals of three noncore steel businesses, of which Cisco was the largest unit, were concluded following the group’s year-end of June 30, 2012. Together, these business carried a book value of R436-million.

Commercial director Ian Henstock, who oversaw the disinvestment process, told Engineering News Online that the sale of Cisco had already been concluded and that the money had been paid over to M&R. It was not deemed necessary to seek approval for the transaction from the competition authorities.

The other two disposals related to BRC Mesh and Reinforcing Steel Contractors and were still subject to Competition Commission approval. The businesses were earmarked for sale to individuals who had past associations with M&R, including former M&R MD Malcolm McCulloch.

Cisco had been placed on care and maintenance in 2010 and M&R had continued paying the electricity account to ensure that power would be available to bring the facility back into operation.

“So while we weren’t making steel there, it is in a state where the switch can be flipped and it can begin producing,” Henstock said, adding that M&R was happy with the price received.

During the financial year, the group, which has been disinvesting from noncore businesses as part of a turnaround strategy, also disposed of its shareholding in Johnson Arabia, RSC Ekusasa Mining, Alert Steel Polokwane, Freyssinet Posten, BRC Arabia and Clough’s marine construction business.

Laas said all deals relating to the remaining steel businesses should be concluded at net book value over the coming 12 months.

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