Construction engineering conglomerate Aveng has announced the sale of 100% of its manufacturing business unit, Aveng Infraset to Colossal Africa Consortium for a total value of R200 million.
The transaction, which includes the Infraset businesses in South Africa, Zambia, Mozambique, Swaziland and Zimbabwe, will be structured on a cash and debt-free basis with R180 million to be settled in cash on the effective date and a further cash top up of R20 million payable within two years, both of which are fully funded.
A new strategy
This sale forms part of Aveng’s new, focused strategy which aims to propel the Group to become an international infrastructure and resources group operating in selected fast-growing markets and capitalising on its considerable knowledge and experience.
As part of this process, the Group announced, in February 2018, that it would sell businesses and assets that did not support its overall long-term strategy. The individual Aveng Manufacturing business units were among those identified for sale.
Commenting on the sale Aveng Executive Chairman, Eric Diack, says the disposal of non-core assets is a key part in the delivery of the Group’s strategic action plan and is receiving significant attention from the Aveng management team.
Reducing overall debt
“Not only have we been able to realise acceptable value for our shareholders through this sale, but we are confident that the Infraset business will be successful in the hands of the new owners, ensuring a sustainable future for employees and customers.”
Proceeds from this transaction will be used to strengthen Aveng’s financial position and reduce overall debt. The transaction is expected to close no later than 30 April 2019 after all conditions have been met.