AEG : Repudiation and Termination of Leonardo Contract:
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
Share code: AEG
Share ISIN: ZAE000194940
("Aveng", "the Company")
REPUDIATION AND TERMINATION OF LEONARDO CONTRACT
Aveng has received a notice purporting to terminate the contract for the construction of the Leonardo in Sandton
("the Contract") from Seventy Five on Maude (Pty) Limited, which is part of Mr. Bart Dorrestein's Legacy Group ("the
Aveng entered into the Leonardo Contract in October 2015. In the intervening period, the project suffered delays,
the responsibility and consequence of which are the subject of various disputes, dealt with in terms of the agreed
dispute resolution mechanisms.
Aveng's position is that the grounds for termination relied on by the Employer are incorrect, inaccurate and ill-
conceived, and are accordingly denied. Furthermore, Aveng is of the view that the Employer is itself in material
breach of the Contract, which precludes the possibility of a valid termination. Therefore, the action taken by the
Employer amounts to a clear repudiation of the Contract.
Aveng has accepted the repudiation and as a result has consequently terminated the Contract on the basis of this
repudiation. Aveng has fully reserved its rights and intends to recover its damages resulting from the termination.
Aveng considers the building to be practically complete for the purposes of its intended use.
The Employer has made a call on the Construction Guarantee ("the Bond"), procured by Aveng as part of the
Contract. The call was made on the basis of the Employer's termination of the Contract. The value of the Bond is
R87.4 million. This will be dealt with within Aveng's existing financing arrangements.
Aveng is accordingly considering its position and taking advice as to what remedies it will have recourse to in respect
of this, as it considers the call on the Bond to be incorrect for the reasons outlined above.
09 January 2020
UBS South Africa Proprietary Limited
Group Executive: Strategy & Investor Relations
Tel: 011 779 2979
Date: 09-01-2020 02:00:00
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