The outlook for heavily indebted, loss-making construction group Aveng is grim, given engineering group Murray & Roberts’s (M&R’s) decision to abandon its controversial bid to buy the 125-year-old company. This leaves Aveng in a perilous position. In the six months ended December 31 2017 it reported a loss of 87.4c a share and debt of R3.25bn. The group has struggled to sell assets identified as noncore. Its plans for a R1.8bn rights offer were scaled back to R500m on expectations that M&R was set to become a major shareholder. Proceeds from the recent rights offer will be used for the early redemption of R2bn of convertible bonds due to mature in 2019. On Wednesday the Aveng board said it would continue with the planned early bond redemption as soon as practically possible. "Deleveraging the company to reduce its debt burden and to improve liquidity is critical to unlock value for Aveng shareholders," said the board. Although the company has failed to find buyers for its non-core b...
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