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Aveng sells its Electrix business to French company for R1.4bn cash [Mercury, The (South Africa)](Mercury, The (South Africa) Via Acquire Media NewsEdge) AVENG has sold Electrix, its utility, resources and infrastructure contracting business in Australia and New Zealand, to French-based infrastructure and electrical services firm Vinci Energies for about R1.4 billion in cash. The disposal forms part of an initiative by the listed construction and engineering group to strengthen its financial position and pursue contract claims to a positive conclusion while taking advantage of growth opportunities. Electrix is currently held by Aveng's Australian subsidiary, McConnell Dowell. In Aveng's financial year to June, Electrix contributed R3.4bn in revenue to Aveng's total revenue of R52.95bn and had net assets of about R360m. Aveng on Friday also reported that it had received shareholder approval to equity settle the R2bn convertible bond that was issued on July 16, with 97.93 percent of shareholders eligible to vote on the transaction approving the conversion from a cash settled to an equity-settled instrument. It said Electrix was a stand-alone business, which allowed for an expedited sale process with minimal disruption to the group and McConnell Dowell. It said the sale of Electrix positioned Aveng for the next phase of growth in core markets, adding that McConnell Dowell's focus would remain on the delivery of complex infrastructure projects in its traditional markets and continued growth in Asia. Electrix provides end-to-end services to the transmission, distribution, generation, commercial, industrial, gas, water, transport and telecommunications sectors. The Electrix sale is expected to be finalised by the end of next month. Kobus Verster, the chief executive of Aveng, said on Friday that the group had earlier this year set out to diversify its funding sources, extend its debt maturity profile and reduce overall borrowing. "We have made significant progress, having successfully placed a R2bn convertible bond and reaching agreement for the sale of Electrix. Together, we will have raised R3.4bn. "We will continue with our programme to dispose of certain properties, which will position us to take advantage of market opportunities, while we pursue outstanding claims." When the group released its annual financial results last month, Verster said the liquidity position had deteriorated because of the large amount of cash absorbed by claims in the past few years and losses in Grinaker-LTA. Grinaker-LTA reduced its net operating loss to R566 million in the year to June from R968m the previous year, while Aveng's uncertified claims and variations increased by 62 percent to R6.7bn from R4.2bn in the previous year. These largely relate to the Queensland Curtis liquefied natural gas export pipeline and loss-making Gold Coast rapid transit projects in Australia. Aveng last month also confirmed it had commercial issues with the significant contract it was awarded in Chile to sink a shaft at Codelco's Chuquicamata Copper Mine but indicated it hoped to resolve this "on a balanced basis". Verster said Aveng had substantial properties countrywide in Grinaker-LTA and at its manufacturing sites, the bulk of which would be sold. Aveng gained 1.53 percent to R22.61 on Friday. The Mercury (c) 2014 Independent Newspapers (Pty) Limited. All rights strictly reserved. Provided by SyndiGate Media Inc. (Syndigate.info). |