JSE-listed construction group Aveng has announced that it has finalised all conditions to raise R300-million by way of a rights offer, with the opening scheduled for March 1 and closing on March 12.
The company aims to restructure its balance sheet, deleveraging it by R1-billion, which will extend the group’s maturity profile to three years and simultaneously materially improve its liquidity pool.
The rights offer comprises up to 20-billion ordinary no par value shares in Aveng and as many Class A shares that may be required to be issued to the underwriters to ensure the minima of the rights offer as required by the underwriters is attained.
The rights offer will be made to qualifying shareholders at a subscription price of 1.5c per rights offer share.
Following this "transformational event", Aveng believes the remaining debt is sustainable, and will be be repaid over the next three years.
Aveng further notes that the transaction not only provides the company with the capital structure flexibility to complete its noncore asset sale programme and to wind down its remaining exposure to discontinued businesses, but also sets the group on a path to pursue its strategy around the group’s core businesses, McConnell Dowell and Moolmans, which have returned to profitability and where Aveng sees further business improvement prospects and growth opportunities.
Meanwhile, the company expects to report a basic profit for the six months ended December 31, 2020, of between R416-million and R460-million, which is a 100% increase from the R170-million loss reported for the six months ended December 31, 2019.
Headline earnings a share are likely to be between 0.4c and 0.8c, compared with a headline loss a share of 1.1c reported for the prior comparable six months.
Aveng will release its results on or about February 23.