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UPDATE 2-S.African M&R's new CEO plans to overhaul finances
March 31, 2011 / 8:08 AM / in 7 years

UPDATE 2-S.African M&R's new CEO plans to overhaul finances

* New CEO to focus on improving balance sheet

* Intend to sell underperforming assets by June 2012

* Departing executives not implicated in bid-rigging

(Adds new CEO, chairman comments)

By Gugulakhe Lourie

JOHANNESBURG, March 31 (Reuters) - The newly appointed head of South African builder Murray & Roberts (M&R) (MURJ.J) said his priority was to improve the group’s finances as it battles with an industry-wide slump.

“The immediate focus will be to improve the liquidity position of the group,” said Henry Laas, an engineer who will replace Brian Bruceas as the company’s chief executive.

One way to do this was to resolve outstanding commercial disputes and sell-off “discontinued operations” by June 2012, Laas said on a conference call.

Last month, M&R fell to a half-year loss, hit by a $111 million writedown. The industry has been in a slump since 2010 World Cup related projects dried up.

The South African construction industry, which avoided the worst of the global economic crisis due to big World Cup projects, is now having difficulty finding new projects as the government and private sector hold back on spending.

M&R, South Africa’s second-biggest building firm by market value, is yet to appoint a successor to financial director Roger Rees, who is also retiring at the end of June.

Chairman Roy Andersen said Laas would develop a new management team, including the selection of Rees’ replacement.

Construction companies are also the target of a bid-rigging probe by South Africa’s competition watchdog, which has put further pressure on share prices.

When asked whether the departing executives were implicated in any way in the bid rigging, Andersen said the resignation and retirement of Bruce and Rees had nothing to do with the probe.

“I am not aware of their involvement at all and that’s categorical,” Andersen said.

“In fact, Bruce has been the champion doing the forensics throughout the group to make sure that anything we might be concerned about is in fact revealed. So, I will be very surprised if their names appear in any form.”

Shares in M&R closed 0.79 percent lower at 26.54 rand.

Reporting by Gugulakhe Lourie; Editing by Elaine Hardcastle

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