Aveng has entered into a fully funded binding sale of business agreement with Ultra Asphalt for the sale of its Rand Roads business unit, subject to certain conditions.
This followed a strategic review concluded last year wherein the business was identified as noncore.
Rand Roads is a specialist division within Aveng Grinaker-LTA and its service offering covers the full supply chain for road rehabilitation and infrastructure, from bitumen binders modification to asphalt production.
Ultra Asphalt is a new investment special purpose vehicles whose shareholders have a 10% interest in a plant-hire operating business in South Africa specialising in mining, heavy plant equipment, quarries, road development, road construction and rehabilitation and water supply.
Aveng will sell the operations of Rands Roads to Ultra on a cash free, debt free basis. The proposed transaction will comprise the business of Rand Roads, including all assets and liabilities of the business, and Aveng’s 15% interest in Specialised Road Technologies.
The proposed transaction consideration is R30-million plus the value of inventory as at the effective date (currently estimated at R7.5-million) with a further working capital adjustment.
The proceeds from the sale will be used to strengthen the financial position of Aveng.
The transaction is expected to close before October 31.
Rand Roads reported a R1-million loss after tax for the interim period ended December 31, 2018.
Aveng has also entered a binding sale of business agreement with a newly formed investment special purpose vehicle (NewCo) for the sale of the Aveng Grinaker-LTA Ground Engineering business unit as a going concern.