Aveng Grinaker-LTA to sell 51% of stake to Kutana Construction
According to Engineering News, construction group Aveng announced on Tuesday that it had concluded a binding agreement to sell a 51% beneficial interest and an initial 45% economic interest in Aveng Grinaker-LTA to Kutana Construction for a maximum of R756-million.
Kutana Construction is a black women-owned and –led business owned by the Kutana group, a Pan-African investment company.
The intention is for the deal to be effective by February 1, 2017, and for the purchase to be settled in full by 2020.
Aveng Grinaker-LTA reported a 21% fall in revenue to R7.3-billion in the year to June 30, 2016, but a far smaller operating loss of R69-million when compared with the R575-million loss of 2015. Verster even expressed optimism that the company could return to profitability during the 2017 financial year.
The transaction would also give effect to the transformation obligations contained in the October 2016 settlement agreement reached with government, following findings of widespread anti-competitive conduct in the industry.
The two parties also intend using Kutana Construction as an investment vehicle for the introduction of Construction Industry Development Board-certified emerging contractors to buy a 25% equity stake in Kutana Construction.