JOHANNESBURG – South African construction group Aveng said on Monday it has ended talks on the sale of its Aveng Trident Steel business due to a failure to reach agreement on price.
Work for South Africa’s construction industry has slowed sharply as government contracts stall and weak commodity prices hit demand from the mining industry. Companies have had to employ new strategies to survive in a sector stunted by an economy that is not expected to grow at all.
“With the termination of negotiations, we are intending to further strengthen Aveng Trident Steel, including capitalising on its leading position within the automotive sector,” said chief executive Kobus Verster in a statement.
Verster also said that the conclusion of a long-running dispute in relation to claims on the Australian Queensland Curtis Liquefied Natural Gas (QCLNG) Export Pipeline project has resulted in a cash inflow to the group of R508 million ($39 million).
On settlement of the QCLNG award the group will significantly reduce net debt by R508 million, the company said. As at June 30 the group’s net debt was R1.07 billion.
Shares in Aveng were down 3.26% at R5.63 at 1044 GMT. ($1 = R13.1188)