South African contractor Aveng has agreed to sell a 70% stake in its property portfolio to Collins Property group for ZAR 1.13 billion (US$ 95 million). The deal is part of the company’s previously announced strategy to divest at least ZAR 2.5 billion (US$ 212 million) of non-core assets.
The deal will see Imbali Props 21, a subsidiary of the South African Collins Property Group, acquire 70% of the shares in Dimopoint. This is a special purpose vehicle – an arms-length subsidiary – of Aveng which acts as a holding company for its properties. Aveng said it would retain a 30% stake in the business and would jointly administer the properties with Collins for a fee.
Aveng said the properties in question were currently occupied by various of its group companies. Following the transaction, it said it will sign lease agreements for the buildings of either five or 12 years.
The deal is subject to regulatory approval and is due to close by the end of June.
Aveng said it would use the proceeds to improve liquidity, reduce debt and take advantage of growth opportunities