UPDATE 2-M&R to sell assets after posting H1 loss

* Diluted headline loss 124 cents vs headline EPS 200 cents

* Hit by $111 mln impairment

* To sell some assets in Australia, Middle East (Adds CEO comments, analyst, background)

By Gugulakhe Lourie

JOHANNESBURG, Feb 23 (Reuters) - South African builder Murray & Roberts (MURJ.J) fell to a half-year loss, hit by a $111 million writedown, and plans to sell underperforming assets as it fights to ride out an industry-wide slump.

The South African construction industry, which avoided the worst of the global economic crisis due to big World Cup projects in 2010, is now having difficulty finding new projects, as the government and private sector hold back on spending.

Construction companies are also the target of a bid-rigging probe from South Africa's competition watchdog, putting their shares under further pressure.

M&R, South Africa's second-biggest building firm by market value, said it was hurt by 795 million rand ($111 million) in writedowns related to delays in contracts with Eskom [ESCJ.UL], the state energy firm, and unresolved Middle East contracts.

"It's a hefty impairment and hopefully it will be enough," Stephen Meintjes, an analyst at Imara SP Reid, said.

Shares in the group closed 2.14 percent lower at 27.41 rand, lagging a 1.58 percent weaker Johannesburg All-share index .JALSH.

"It is disappointing that we have had to do what we have to deliver a loss, but what we said is that we are cleaning the slate," said Brian Bruce, M&R's chief executive.

Bruce and Financial Director Roger Rees said they will step down in June.

"NO PANIC"

The company reported a diluted headline loss per share of 124 cents in the six months to end-December, from a profit of 200 cents per share a year earlier.

M&R said its order book stood at 50 billion rand, including 19 billion of outstanding value on five contracts related to projects with Eskom.

"We had pretty good headroom in our banking facilities. We are not panicking at this point," Bruce said.

Asked whether the company would consider a rights issue to increase funding, Bruce said: "A rights issue is a last-resort situation. We have to resolve the commercial disputes we have, because that's cash we believe we are owed."

He said the company was in talks to sell some of its assets in the Middle East and some properties in Australian business Clough for an undisclosed amount, to bring in cash.

Despite contract challenges, M&R said it expects an increase in full-year revenue in the Middle East and its cement business, but projected no growth for the South African construction business.

($1=7.135 Rand)

(Reporting by Gugulakhe Lourie; editing by David Dolan and David Hulmes)