South African construction firm Aveng have announced that they have terminated an agreement to sell a 51% stake in its Grinaker-LTA unit to a company after the acquiring firm failed to fulfil funding conditions.
Aveng said Kutana Construction, now known as Singabakhi Holdings, failed to meet funding requirements, including raising an upfront payment of South African Rand (ZAR) 20 million (US$1.5 million), by the fulfilment date to complete the deal meant to create opportunities for black contractors. It aimed to help the 125-year-old Aveng become profitable again and introduce a black partner, aligning it with the government’s plan to transform the construction industry and give black people an ownership role.
Aveng said it would still abide by an agreement with the government last year, where six South African construction companies said they would contribute ZAR 1.25 billion (US$92 million) over the next 12 years towards a fund to develop skills.
Companies could either mentor up to three emerging black-owned enterprises or sell not less than a 40% economic interest to a firm that was more than 51% black-owned.