This follows M&R finalising the acquisition of a further 17 percent shareholding in the Bombela Concession Company (BCC) for a total consideration of R405 million.
M&R in August reported that it had concluded a memorandum of understanding to increase its effective shareholding in the BCC by 17 percent to 50 percent through the acquisition of the 8.5 percent shareholding held in the concession company by both Bouygues Travaux Publics SAS and Bombardier Transportation UK.
Henry Laas, the group chief executive of M&R, said on Friday the acquisition was part of the group’s broader capital allocation strategy. He said the BCC held the 15-year concession for operating and maintaining the Gautrain system until March 2026 and M&R expected its investment would continue to provide strong returns in the short to medium term.
He said all conditions precedent related to the transaction had been fulfilled and the effective date was last Friday.
The BCC implements its obligations through its concession agreement, which is held between the Gauteng provincial government and the BCC.
At the incorporation of the concession company, M&R held a 25 percent shareholding and increased its stake in the BCC in 2011 to 33 percent.
Jack van der Merwe, chief executive of the Gautrain Management Agency, welcomed M&R's acquisition of the shareholding, saying they were proud the BCC was now a wholly owned South African company.
André van Rensburg, chief executive of the BCC, said the acquisition would assist the BCC to not only increase local content but to achieve excellence in the execution of the Gautrain concession contract.
Bouygues and Bombardier decided as part of their long-term investment plan to divest from BCC after the settlement last December of disputes in the development period.
In terms of a mutual agreement reached between the shareholders of BCC, Bouygues and Bombardier agreed to sell 8.5 percent each to M&R and the balance of their shares to Strategic Partners Group (SPG) and Calshelf.
The shareholding in BCC now comprises M&R Limited (50percent), SPG (38 percent) and Calshelf (12 percent).
The BCC secured a R1.27billion settlement for disputes over the development of the project late last year. These disputes included a delay and disruption claim stemming from the late handover of land for construction of the project.
- BUSINESS REPORT