Construction company Aveng intends to raise R300-million by way of a fully co-underwritten renounceable rights offer so that it can restructure its balance sheet, which will allow the group to reset its capital structure.
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 on or about February 5.
Aveng notes in a January 26 statement that the rights offer and restructuring of the group will assist the company in deleveraging its balance sheet by more than R1-billion, which will extend the group’s maturity profile to three years and simultaneously materially improve Aveng’s South African liquidity pool.
Following this "transformational event", Aveng believes the remaining debt is sustainable, and the remaining balance is forecast to 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.