Strug­gle for sur­vival

Financial Mail - - MONEY&INVESTING - Njobe­nis@busi­

Is Aveng, which just a decade ago was SA’S big­gest con­struc­tion com­pany, near­ing the end of the road?

Al­ready, the crunch in in­fra­struc­ture spend­ing has claimed a num­ber of con­struc­tion scalps — the most prom­i­nent of them Basil Read, which tipped into busi­ness res­cue in June.

Aveng has been sur­viv­ing on fumes un­til now: for the six months to De­cem­ber last year, it made a bot­tom-line loss of R346m. And with debt of R3.25bn, it can only be a mat­ter of time be­fore its bankers start de­mand­ing a greater say in any re­vival plan.

Al­ready, cer­tain debt-to-eq­uity covenants may have been breached, as Aveng’s shares have fallen 98% in the past year to just 6c. It’s a far cry from the heady days of 2007 when con­tracts to build World Cup sta­di­ums were rolling in, and its share price was R71.

So can it sur­vive? And if it does, will it be worth in­vest­ing in?

“They must find cash,” says an­a­lyst Wayne

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