JSE-listed Aveng has entered into a binding term sheet for the sale of the Aveng Infraset businesses, comprising the South African division and the Infraset business of the foreign subsidiaries of Aveng Africa, to the Colossal Africa Consortium.
Infraset was identified as a noncore asset during Aveng’s strategic review, the results of which were announced in February 2018.
Colossal is a newly formed 100% black-owned investment special purpose vehicle that is owned by Isongo Investments and Colossal Africa Infrastructure.
Colossal Africa Infrastructure is a company with interests in the materials supply sector, whereas Isongo is a rail company providing specialised services and products for railway industries.
Aveng will sell all the businesses of Infraset in South Africa, Zambia, Mozambique, Swaziland and Zimbabwe.
The proposed transaction will be structured on a cash and debt free basis for a net transaction consideration of R180-million to be settled in cash on the effective date of the transaction and a further cash top-up of R20-million payable within two years if certain conditions are met.
The proceeds will be used to strengthen Aveng’s financial position and reduce its overall debt.
The transaction is expected to close by no later than April 30.