AVENG LIMITED - Category 2 Transaction Announcemen18 Feb 2019
AEG 201902180033A
Category 2 Transaction Announcement: Disposal of Aveng Infraset business

(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
("Aveng" or "the Group")

CATEGORY 2 TRANSACTION ANNOUNCEMENT: Disposal of Aveng Infraset business
Background and rationale
In February 2018, Aveng Limited ("Aveng" or the "Group") announced the results of its strategic
review ("Strategic Review"). The outcome of the Strategic Review was a new and focused strategy to
be an international infrastructure and resources group operating in selected fast-growing markets
capitalising on its considerable knowledge and experience. As part of this Strategic Review, the
Group announced that it intends to dispose of certain non-core assets and properties. The Aveng
Infraset business ("Infraset"), consisting of the South African division and the Infraset business of the
foreign subsidiaries of Aveng Africa Proprietary Limited ("Aveng Africa"), was identified as one of
those non-core assets.
Aveng has entered into a binding term sheet for the sale of Infraset to the Colossal Africa
Consortium ("Colossal SPV"), on the conditions set out in this announcement ("Proposed

About Infraset
Infraset has a rich history, with over 85 years of experience in the manufacturing of infrastructure
products , including Grinaker Precast opening the Brakpan factory to produce railway sleepers in
1969. Today, Infraset manufactures a diverse range of precast concrete products to world-class
quality standards including the following product categories: Civil Engineering, Landscaping, Poles
and Masts, Railway Products, and Roof Tiles. Infraset is a competitive player in all categories and a
leader in the rail sleeper industry and continues to innovate and look for new opportunities.

Overview of Colossal SPV
Colossal SPV is a newly formed 100% black owned investment special purpose vehicle made up of
Isongo Investments (Pty) Ltd and Colossal Africa Infrastructure (Pty) Ltd. Colossal Africa
Infrastructure is a company with interests in the materials supply sector, whereas Isongo is a rail
company providing specialised services and products for railway industries.

Particulars of the Proposed Transaction
Aveng will sell all the businesses of Infraset in South Africa, Zambia, Mozambique, Swaziland and
Zimbabwe as a going concern.
The Proposed Transaction will be structured on a cash and debt-free basis for a net transaction
consideration of R180 million to be settled in cash on effective date and a further cash top up of R20
million payable within two years (if certain conditions are met), both of which are fully funded. The
proceeds will be used to strengthen the financial position of the Group and to reduce overall debt.
The Proposed Transaction is expected to close no later than 30 April 2019 after all conditions have
been met.
Consents and conditions precedent
The Proposed Transaction is subject to the following conditions precedent:
    -   The conclusion of the final and binding agreements;
    -   The cession and assignment of the existing leases to Colossal SPV;
    -   The conclusion of all necessary agreements in relation to licenses used for purposes of the
        Infraset; and
    -   The parties obtaining all statutory and regulatory approvals in all jurisdictions, including
        Competition Commission approval.
The transaction agreements will include representations and warranties normal for a transaction of
this nature.

Net asset value and loss attributable to Infraset as at 30 June 2018
Infraset was reclassified and reported as Held for Sale in the annual financial statements for the year
ended 30 June 2018. As part of this reclassification, the basis of valuation was changed to fair value
less cost to sell. The net asset value of the business unit before impairment amounted to R
491million for the year ended 30 June 2018.
Infraset reported a loss after taxation before impairment of R 52 million for the year ended 30 June
2018. Following the reclassification to Held for Sale and the resultant fair value adjustment, Infraset
reported an impairment of R365 million for the year ended 30 June 2018.
The historical financial information for Infraset was prepared in accordance with International
Financial Reporting Standards.

The Proposed Transaction is categorised as a Category 2 transaction in terms of the JSE Listings
Requirements and accordingly no shareholder approval is required.
This information has not been reviewed or reported on by the Group's external auditors.

Jet Park
18 February 2019
JSE Sponsor
UBS South Africa Proprietary Limited
Legal advisors
Baker & McKenzie

Michael Canterbury
Group Executive: Strategy & Investor Relations
Tel: 011 779 2979
Email: michael.canterbury@avenggroup.com

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