Aveng sells treatment business as it tries to keep its head above water
The company says proceeds from the sale would be used to strengthen its financial position
Struggling construction group Aveng on Friday announced the sale of Aveng Water and Aveng Namibia Water to a black-owned investment company for R95m.
The sale is part of Aveng’s disposal of noncore assets following the company’s strategic review in February 2018. The review is part of the company’s move to position itself as an international infrastructure and resources group operating in selected fast-growing markets.
“As part of this process, the group identified core businesses and assets that support its overall long-term strategy and announced that it intends to dispose of certain noncore assets and properties,” the company said on Friday.
It said following extensive negotiations it had entered a binding sale and purchase agreement with Infinity Partners, a company partly owned by Aveng Water MD Suzie Nkambule. The other shareholder in Infinity Partners is E-Squared Investments, a company which invests in high-impact businesses, according to Aveng.
“This sale is another important step in the delivery of our strategic action plan and in the refocusing of Aveng to become an international infrastructure and resources group," Aveng executive chairman Eric Diack said.
"The transaction also addresses various strategic imperatives, such as the retention of all existing jobs, surety for the continuation of existing client contracts, and sustainability to ensure the business remains successful well into the future,” he said.
Aveng Water is a water-treatment process engineering and project delivery business with a broad service offering, from project development to long-term operations and maintenance.
“It is well positioned in both public and private water and wastewater reuse developments with strong international and local partners to meaningfully participate in the delivery of the SA water and sanitation infrastructure backlog,” Aveng said.
Aveng said proceeds from the sale would be used to strengthen its financial position. In a bid to improve its liquidity, the company’s strategy includes selling noncore assets such as Grinaker-LTA and Trident Steel operating groups, manufacturing businesses and property and investment assets. The disposals would enable the group to focus on the core assets of McConnell Dowell, Australian specialist infrastructure contractor and subsidiary and surface mining contractor Moolmans.
Aveng said the deal, which is expected to close by the end of March, was subject to various conditions, including the approval by the competition authorities in all applicable jurisdictions, the sanction of certain Aveng financiers and the successful conclusion of all final agreements.
Aveng shares were unchanged at 5c on Friday.