AVENG LIMITED - Disposal of Aveng Duraset Alrode b7 Aug 2019
AEG 201908070001A
Disposal of Aveng Duraset Alrode business

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

Disposal of Aveng Duraset Alrode business
1. Background and rationale
Following the strategic review concluded in 2018 and as part of the non-core disposal process,
Aveng has entered into a fully funded binding sale of business agreement with Videx Wire Products
Proprietary Limited ("Videx") for the sale of the Aveng Duraset Alrode business ("Duraset Alrode") as
a going concern ("Proposed Transaction"), subject to certain conditions precedent.
Duraset Alrode was identified as non-core as part of the strategic review and is a diversified supplier
of engineered support solutions to the mining and geotechnical industries and has positioned itself
over time as a leading supplier of safety critical products to the mining industry.
Videx is a leading manufacturer and supplier of roof support systems and ventilation ducting for the
mining industry. The company has been in the mining roof support industry since 1984 and prides
itself on supplying innovative, cost effective and safe quality products.
2. Particulars of the Proposed Transaction
Aveng Duraset consists of operations conducted at its Alrode, Germiston, and Westonaria premises.
The Proposed Transaction is limited to the sale of the Duraset Alrode operation and product
portfolio to Videx which includes all assets and liabilities of Duraset Alrode.
The Proposed Transaction consideration is R50 million in cash. This will be subject to adjustment (up
or down) based on the achievement of an aggregate sales target for the two months preceding the
Effective Date ("Target Sales"). The adjustment will be determined on the percentage difference
between the actual sales achieved and the Target Sales. The consideration is further subject to a net
working capital adjustment. The minimum consideration payable is R30 million.
The proceeds from the sale will be used to reduce debt and strengthen the financial position of
3. Consents and conditions precedent
The Proposed Transaction is subject to the following consents and conditions precedent:

       Approval being granted by, or notification given to, the various financiers who are a party to
        the Common Terms Agreement concluded with Aveng;
       If required, approval of the competition authorities;
       Consent being obtained from the relevant third parties for all material contracts to be
        assigned to the Purchaser in a form acceptable to both the Purchaser and the Seller; and
       Entering into a sub-lease between the Purchaser and the Seller in respect of the Duraset
        Alrode property for a minimum period of three months.

    The transaction agreements include warranties normal for a transaction of this nature.
4. Effective date
The Effective Date shall be the first business day of the calendar month following the fulfilment or
waiver (as the case may be) of the conditions precedent outlined above.
The Proposed Transaction is expected to close no later than 31 October 2019.
5. Net asset value and loss attributable to Duraset Alrode as at 31 December 2018
Duraset Alrode was reported as held for sale in the interim financial statements for the period ended
31 December 2018. As part of this classification, the basis of valuation is fair value less cost to sell.
The net asset value of Duraset Alrode amounted to R47 million at 31 December 2018.
Duraset Alrode reported a loss after taxation of R9 million for the interim period ended 31
December 2018.
The historical interim financial information for Duraset Alrode was prepared in accordance with
International Financial Reporting Standards.
This financial information has not been reviewed or reported on by the Group's external auditors
6. Categorisation
The Proposed Transaction is categorised as a Category 2 transaction in terms of the JSE Listings
Requirements and accordingly no shareholder approval is required.

Jet Park
7 August 2019

JSE Sponsor to Aveng Proprietary Limited
UBS South Africa Proprietary Limited

Legal Advisors to Aveng Proprietary Limited
Baker McKenzie

Transaction Advisor to Videx Wire Products Proprietary Limited
Sapila Capital

Legal Advisors to Videx Wire Products Proprietary Limited
Falcon & Hume Inc

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

Date: 07/08/2019 07:05:00
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