AVENG LIMITED - Disposal of Electrix Pty Limited (Australia) and Electrix Limited (New Zealand)

Release Date: 19/09/2014 17:50
Code(s): AEG
 
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Disposal of Electrix Pty Limited (Australia) and Electrix Limited (New Zealand)

AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
("Aveng" or "the Group")


DISPOSAL OF ELECTRIX PTY LIMITED (AUSTRALIA) AND ELECTRIX LIMITED (NEW
ZEALAND) (COLLECTIVELY, “ELECTRIX”) (“the Transaction”)


INTRODUCTION AND RATIONALE
As previously announced, in order to strengthen the financial position of the Group, the
Board decided to diversify the Group’s funding sources, extend the debt maturity profile
and reduce overall borrowing levels and the cost thereof to enable Aveng to concurrently
pursue contract claims to a positive conclusion whilst taking advantage of growth
opportunities. Consequently, the Group:


   -   Successfully placed a R2 billion senior unsecured convertible bond with a coupon of
       7,25% maturing on 24 July 2019. Authority was granted at the General Meeting on
       19 September, to equity settle the bond conversion;
   -   Embarked on a programme to dispose of non-core assets with the objective of
       raising at least R2,5 billion. The assets to be disposed of comprise properties and a
       business unit which up until now could not be disclosed as negotiations had not
       sufficiently advanced.


Electrix is a standalone business which allowed for an expedient sale process with minimal
disruption to both its own and McConnell Dowell’s operations.


Aveng wishes to advise shareholders that agreement has been reached today, 19
September 2014, to divest its wholly owned (via McConnell Dowell) Electrix business to
VINCI Energies through a share sales transaction for approximately R1,4 billion to be
settled in cash.


McConnell Dowell has had a strong relationship with Electrix over many years and will
continue that close working relationship in future. VINCI Energies is committed to grow the
business in the region and deliver superior service to its customers.
Aligned to the strategic objective to strengthen the financial position of the Group, the sale
of Electrix positions Aveng for the next phase of growth in core markets. McConnell Dowell
will continue to focus on the delivery of complex infrastructure projects in its traditional
markets and continued growth in Asia leveraging off its strong footprint and reputable
history in that region.


The Transaction is expected to be finalised by 31 October 2014.


SUBJECT OF THE TRANSACTION AND A DESCRIPTION OF ITS BUSINESS
The Transaction encompasses the acquisition of 100% of the shares in Electrix Pty Limited
(Australia) and Electrix Limited (New Zealand) currently held by McConnell Dowell Holdings
Pty Limited (Australia), by a wholly owned subsidiary of VINCI Energies.


Electrix is a utility, resources and infrastructure contractor providing end-to-end services to
the transmission, distribution, generation, commercial, industrial, gas, water, transport and
telecommunications sectors in the New Zealand and Australian markets.


Electrix’s revenue in FY14 attributable to Aveng was R3,4 billion. As at 30 June 2014, it
had net assets of approximately R360 million.




PURCHASER
VINCI Energies is a French based infrastructure and electrical services company that
serves public authorities and major business customers globally, helping them to deploy,
equip, operate and optimise their energy, transport and communication infrastructure,
industrial facilities and buildings.


EFFECTIVE DATE
As stated above, the Transaction is expected to complete by 31 October 2014.


CONDITIONS PRECEDENT
There are no conditions precedent to the Transaction.


APPLICATION OF THE PROCEEDS
The proceeds will be used to strengthen the financial position of the Group, to reduce
overall debt, and to take advantage of growth opportunities.
CATEGORISATION OF THE TRANSACTION
The Transaction is a Category 2 transaction in terms of section 9 of the JSE Listing
Requirements.


CAUTIONARY ANNOUNCEMENT
The pro forma financial effects will be released in due course. Shareholders are therefore
advised to exercise caution when dealing in their Aveng securities.




By order of the Board of Directors


Sandton
19 September 2014


Sponsor:

J.P. Morgan Equities South Africa Proprietary Limited

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