Good deal for Aveng Aveng will have the option to call all of the bonds at the full principal amount plus accrued interest from August 2017‚ subject to conditions. An Aveng representative said that from a dilution perspective‚ issuing convertible bonds had been a better option than a rights issue. In addition‚ the coupon payment will be lower than the rates charged by the banks. Therefore‚ after taking into account both the ability to call the convertible early and the size of the offering‚ the convertible is the preferred option, he said. Following a downgrade of Avengs credit rating in December last year‚ Fitch Ratings in March downgraded Avengs long-term credit rating to BBB from A‚ with a negative outlook. This was attributed to continued deterioration in the groups financial performance and cash position because of its weaker South African operations. The downgrade also reflected limitations to cash movements within the group‚ and the relative net financial position between the Australian operations and the rest of the group. The South African trading environment has proved difficult for contractors‚ who have bemoaned the stalling of the governments infrastructure programme. Several contractors have reported loss-making contracts in an environment where margins have been squeezed. Murray & Roberts replaced Aveng as the largest listed construction firm by market size in August last year.
Posted on: Mon, 21 Jul 2014 14:00:00 +0000
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