Aveng sheds water in strategic disposal
Sells Aveng Water and Aveng Namibia Water for R95m as part of a process announced in February last year
LISTED financially troubled construction and engineering groups Aveng and Group Five are both making progress with the implementation of turnaround strategies aimed at returning these once-thriving and profitable companies to financial health.
Aveng on Friday reported the sale of 100 percent of Aveng Water, its water treatment process engineering and project delivery business, and Aveng Namibia Water business to Cambrose 735, a special-purpose vehicle incorporated as a private company named Infinity Partners, for R95 million.
It confirmed the sale formed part of Aveng’s strategic disposal process announced in February last year when the company announced the outcome of its strategic review.
It follows Group Five reporting on Thursday that it had agreed to sell its Everite fibre cement products business and Sky Sands mining and washing operation to a private equity consortium comprising Trinitas Private Equity and Agile Capital for R480m.
Group Five also confirmed this sale was in line with its re-evaluated strategy and structure announced in November 2017 to address its under performance and the changes necessary to achieve acceptable returns in a challenging market landscape.
Eric Diack, executive chairperson of Aveng, said on Friday that the sale of Aveng Water was another important step in the delivery of their strategic action plan and the refocusing of Aveng to become an international infrastructure and resources group.
The transaction was expected to close by the end of March after all conditions had been met, with proceeds used to strengthen Aveng’s financial position and applied as working capital to the remainder of the Grinaker-LTA business as previously agreed with the group’s South African lenders.
Infinity Partners was a 100 percent black-owned company jointly held by E-Squared Investments and Suzie Nkambule, the current managing director of Aveng Water.
E-Squared was a large-impact investor that invested in high-impact businesses driven by Allan Gray Orbis Foundation Fellows who had entrepreneurial ambition and were seeking to make meaningful transformation possible in the South African economy.
Aveng last year restructured its balance sheet by raising R493 million, the early redemption of a R2 billion convertible bond that was to mature in July this year, and the restructuring of the group’s bank debt.
Diack said in September tha turn around the group’s performance.
It identified Aveng’s Australian business McConnell Dowell and openpit mining business, Moolmans, as core businesses, while Grinaker-LTA, manufacturing and steel were deemed non-core.
The two other pillars of the strategic review involved the capital restructuring of Aveng and improving the operational performance of its core businesses.