Aton shareholders have been very supportive of our strategy - Aveng CEO Eric Diack

Aveng, once a prominent construction firm in Africa, has faced significant challenges in recent times, leading to a sharp decline in its stock performance on the Johannesburg Stock Exchange. In a recent interview with CNBC Africa, Aveng Chair and CEO, Eric Diack, shed light on the company's tumultuous journey and outlined the strategic measures being undertaken to steer the organization back to stability. Diack highlighted the series of setbacks that plagued Aveng in the past year, including major contract blowouts and the need to impair revenue from certain contracts. These issues severely impacted the company's financial results and necessitated the renegotiation of banking facilities. Despite the tough market conditions in South Africa, Diack expressed optimism about the construction landscape in Australia, foreseeing ample work opportunities over the next decade. However, the domestic market remains challenging due to limited construction projects and subdued manufacturing activity. To address these challenges, Aveng embarked on a comprehensive capital markets exercise, raising substantial funds through a rights issue and converting existing debt into equity. Additionally, the company successfully renegotiated banking arrangements to extend debt repayment deadlines, providing a solid foundation for the execution of its revamped strategy. Diack emphasized the pivotal role of balance sheet repair in restoring investor confidence and positioning Aveng for future growth. The company's improved financial performance and debt reduction efforts have instilled a sense of stability, despite the constrained order book. Looking ahead, Aveng intends to streamline its operations by focusing on core businesses such as McConnell Dowell and Moolman, while divesting peripheral units like Grinaker LTA, manufacturing, and steel divisions. Diack revealed ongoing discussions with potential buyers for these non-core assets, citing strong interest from private equity firms and industry players. Despite the challenging market environment, Diack expressed confidence in achieving favorable sales prices for the disposed businesses, underscoring Aveng's commitment to realizing value from the divestiture process. While the company aims to conclude the asset sales by 2019, Diack emphasized that the strategy is not driven by desperation but a calculated approach to optimizing the portfolio. The CEO confirmed that offers received thus far have primarily come from local buyers, with some international interest as well. As Aveng navigates the complexities of restructuring and asset disposal, Diack remains steadfast in his belief that the company's strategic initiatives will pave the way for a sustainable turnaround amid turbulent market conditions.