Aveng secures extensions on its current debt and sees its share price leap
Construction group Aveng has thrown the kitchen sink at a host of long-outstanding claims – and plans to book a R2.7bn impairment charge as a result. That will push it to a full-year headline loss of between R6.3bn and R6.6bn — a staggering figure given that its market cap at Wednesday’s close was R1.46bn. Yet the news helped drive Aveng shares 28% higher at one point. They closed 20.7% up. Aveng is keen to emphasise that the impairment will have no cash consequence on its results and it has also reached agreement with its major funding banks to renew and extend its debt, some of which is moving close to maturity. This means that the company “now has sufficient liquidity to execute on its plans to return the business to a position of sustainable profitability”, according to a statement. Lentus Asset Management portfolio manager Nic Norman-Smith said the clarity on its liquidity was “one of the most positive” aspects of the update. “It provides a bit more certainty — there were a num...
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