Aveng expects to wrap up noncore disposals by June 2019

Embattled construction group Aveng expects to finalise the disposal of all noncore businesses by June 2019.

Following a strategic review, the JSE-listed company identified Aveng Trident Steel, Aveng Grinaker-LTA, Aveng Manufacturing, as well as certain properties and other assets, for sale. At the same time, the review determined that its Australian business, McConnell Dowell, and its mining unit, Moolmans, remained core.

In a trading statement published on Friday, Aveng reported “significant interest from credible buyers for the majority of the businesses earmarked for sale”. “There has been engagement with potential buyers for all noncore assets, with non-binding offers received for several and negotiations well advanced on others.”

The company had already entered into agreements to sell its Vanderbijlpark and Jet Park properties for R254-million, with the disposal of the Jet Park property remaining subject to shareholder approval. Aveng said management had obtained independent valuations for all the assets up for sale and remained confident that “acceptable values” would be realised for the assets given the interest received from the market.

The decision to dispose of noncore assets would result in a R2.2-billion adjustment in the valuation of the assets. The change would be reflected in basic earnings and basic earnings per share, but would be excluded from headline earnings and headline earnings per share when Aveng releases its results for the year to June 30 on September 25.

The company said the headline loss a share for the 12-month period would be more than 100% better than the comparable period. The headline loss a share will be between 297c and 329c, compared with a reported loss of 1 625.3c in 2017.

The headline loss for the year would be between R1.6-billion and R1.8-billion, compared with a loss of R6.5-billion in 2017. At the end of June, the company raised R493-million through a rights offer designed to improve its liquidity. In parallel it was progressing with a proposal to settle existing convertible bonds before their maturity in July 2019.

Bondholders voted on August 30 to accept the terms of the early bond redemption and shareholders will be requested to vote on resolutions to give effect to the specific issue of shares to settle the bonds on September 10.