The rationale for the transaction according to the group, is 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 embarked on a programme to dispose of noncore assets with the objective of raising at least R2,5 billion. The assets to be disposed of comprised properties and Electrix, the sale of which was concluded on 19 September 2014.

Aveng has agreed to dispose of 70% of Dimopoint Proprietary Limited, a special purpose vehicle created for the purpose of holding the properties and which is wholly owned by Aveng Africa (Pty) Limited, to Imbali Props 21 Proprietary Limited, an entity of the Collins Property Group for approximately R1,127 billion to be settled in cash.

Collins Property Group is a privately owned property group, with a history spanning four generations over a period of more than 100 years and is predominantly a commercial property development and investment company that owns and manages properties throughout Africa and the United Kingdom.

Due to the strategic nature of the investment, Aveng has elected to retain a 30% shareholding in Dimopoint and will jointly administer the Properties with Collins for a market-related fee. The Properties are currently tenanted by various entities within the Group, and Aveng Africa will sign a head lease in respect of the Properties for periods of 5 and 12 years.

The Transaction is still subject to the fulfilment suspensive conditions.