Aveng taps investors for more cash

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Aveng taps investors for more cash

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Published Date: 2021-04-07 | Source: Stephen Gunnion | Author: Stephen Gunnion

Aveng taps investors for more cash

The engineering and construction group says shareholders indicated they wanted to invest more.

Aveng is going ahead with another rights offer to raise up to R100-million from shareholders. That follows the successful completion of the engineering and construction group's R300-million capital raise last month.

The initial rights offer, part of a balance sheet restructure aimed at sustaining its business, received stronger than expected support from shareholders, Aveng said. Investors holding 92.6% of its stock participated in the capital raise, in which it sold new shares at 1.5c each, a 39.5% discount to the average price the company's shares traded at in the 30 days up to 27 November 2020. In July 2018, it raised R493-million at 10c per share.

Aveng said the additional capital would provide it with an opportunity to further solidify its balance sheet, accelerate its business plan, and fund identified growth opportunities which would provide attractive returns, mainly in its Moolmans mining services business.

Apart from the capital raise, Aveng has been selling non-core businesses to reduce expensive debt that it has had to service while navigating a downturn across the construction sector. The disposals will leave it focused on Moolmans and its McConnell Dowell business in Australia. Combined with a restructuring of its local debt and an early cash settlement of notes issued through iNguza Investments, Aveng said it would be able to create a more sustainable structure.

Aveng is holding an extraordinary general meeting on 5 May for shareholders to vote on the rights offer.

The company's shares closed unchanged at 4c yesterday.





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