Aveng: High demand sees bond raising R2bn

Aveng, the listed construction and engineering group, launched yesterday a R1.5 billion senior unsecured convertible bond maturing in 2019. After the close of JSE trading yesterday, Aveng said high demand meant it had successfully raised the issue amount to R2bn. The offering was made through an accelerated bookbuild via a private placement to South African and international institutional investors outside the US, Canada, Australia and Japan. Aveng said it intended to use the net proceeds to repay existing debt facilities, extend its debt maturity profile and for general corporate purposes. It added that the offering formed part of the company’s strategy to manage its liquidity needs, diversify its funding sources and reduce its reliance on bank debt, and to position itself to take advantage of growth opportunities. The bonds will be issued at 100 percent of their principal amount and are expected to carry a coupon of between 6.75 percent and 7.50 percent a year, payable semi-annually in arrears on January 24 and July 24 of each year, with the first coupon to be paid in January next year. After the close, Aveng said the coupon was set at 7.25 percent. Subject to the passing of shareholder resolutions at a meeting on or about September 19, the bonds will be convertible into ordinary shares. Barclays and JP Morgan Securities acted as joint bookrunners while Nedbank co-managed the placement. Aveng dropped 6.14 percent to close at R22 yesterday. – Roy Cokayne