AVENG STILL LOST IN THE WOODS
Aveng has announced the sale of 70% of its property portfolio for just over R1.2bn. This helps the company a bit as it provides a chunk of cash (the amount is around half its market cap) but it doesn’t get it out of the woods. It will now have to lease back the properties at a cost, and t hat R1.2bn is only sl i ghtly higher t han i t s operat i ng f r e e cash outf low for the last reporting period. This a l so comes on t he back of a R1.5bn convertible bond it issued in the middle of last year, showing just how cash-i ntensive the industry is and how tough the current conditions are. The bottom l i ne here is t hat t he company is struggling and this move will not save it – it will merely ease t he pressure for a short while.