Aveng sells off Duraset division to stay afloat
The sale is part of the struggling construction firm's disposal of noncore assets
Aveng, once SA’s largest construction firm, on Wednesday announced the sale of another business as part of its strategy to dispose of noncore assets in order to stay afloat and strengthen its financial position in a depressed market.
The company, which has lost about 99.95% of its value in the past 11 years, has sold Aveng Duraset, a supplier of engineered support solutions to the mining and geotechnical industries for about R50m to Videx Wire Products.
Videx is a manufacturer and supplier of roof-support systems and ventilation ducting for the mining industry. Aveng said the company has been in the mining roof-support industry since 1984.
Aveng, which is due to release full-year results later in August, is one of a handful of once glorious construction firms whose value has almost been obliterated amid dwindling infrastructure projects.
Aveng said it had identified the loss-making Aveng Duraset, a supplier of safety products to the mining industry, as one of the noncore assets following the group’s 2018 strategic review.
Aveng Duraset is the latest in a number of units that Aveng has sold as the group repositions itself as an infrastructure, mining and resources company.
In January 2019, the group announced the sale of Aveng Water to Infinity Partners, a 100% black-owned company. That followed the sale of Aveng Rail in October 2018 to Mathupha Capital, another black-owned investment company.
Aveng had previously given itself until June 2019 to complete the majority of the disposals, which will help the group reduce its debt. As at December 31, 2018, Aveng’s debt was R35m.
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.
In the six months ended December 31, 2018, Aveng Duraset reported a net loss of R9m. At December 31, 2018, Aveng Duraset’s net asset value was R47m, Aveng said.
Aveng shares were down 33.33% to 2c on Wednesday.