Shareholders back Aveng move on McConnell Dowell

Posted On Monday, 28 July 2003 02:00 Published by Commercial Property News
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THE A20m takeout of minorities in SA construction group Aveng's Australian subsidiary McConnell Dowell moved a step closer to conclusion at the end of last week when a requisite body of shareholders backed the plan, Aveng said on Friday.

Carl Grim AvengThe deal, which has sparked some anti-SA sentiment in the Australian media, is still dependent on the outcome of a hearing this week before the Australian federal court, set for Friday.

 The decision to buy out the minorities, who hold 37% of McConnell Dowell, was taken by independent directors on the board of the Australian construction firm, which is active in pipeline projects and has expertise in civil, mechanical and electrical engineering.

 The rationale for the move came from a feeling that McConnell Dowell, as it is positioned now, was falling behind global trends and would be better placed in bidding for contracts as a wholly owned Aveng subsidiary.

 When the planned deal was announced in April, Aveng CE Carl Grim said the new global trend was for an entire contract to be awarded to a single construction group, instead of a consortium of contractors working on a large project. In such circumstances, McConnell Dowell might not have the scale to compete internationally.

 Grim said at the weekend that he would prefer to delay any reaction to developments in Australia until he knew the outcome of the hearing before the Australian federal court.

 However, SA investment analysts have said that the takeout of McConnell Dowell minorities had not been unexpected, and that the deal would benefit Aveng.

 A clear majority of 87,4% of McConnell Dowell shareholders approved the scheme of arrangement under which Aveng will acquire all the shares in McConnell Dowell, while there was a 100% vote in favour of a scheme of arrangement to purchase outstanding options at 20 Australian cents per option.

 McConnell Dowell has been working alongside another Aveng subsidiary, Grinaker LTA, in the construction of the 856km Sasol pipeline from the Temane gas field in Mozambique to Secunda in Mpumalanga with CCIC of Greece as the third member of the consortium.

Last modified on Friday, 21 June 2013 21:45

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