AVENG LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1944/018119/06)
ISIN: ZAE000302618
SHARE CODE: AEG
("Aveng" or "the Group")




 Disposal of Trident Steel completed for total cash proceeds of R1,2 billion



Disposal of Trident Steel

Shareholders are referred to previously published announcements on the Johannesburg Stock Exchange News
Services (SENS) regarding the disposal of Trident Steel (“the Business” or “Trident Steel”), a division of Aveng
Africa Proprietary Limited, to Trident Steel Africa Proprietary Limited (“the Transaction”).

The Group is pleased to report that all conditions precedent to the Transaction have been fulfilled and/or waived
and that the sale of Trident Steel has closed. As previously reported, the Transaction was concluded as a “locked
box” transaction based on the 30 June 2022 balance sheet, subject to a working capital adjustment as at 30
June 2022, with cash on hand being retained by the Group. Further, a ticking fee was levied from 1 July 2022
to closing date.

Total cash inflow to the Group from the Transaction amounted to R1 222 million. This comprised R700 million
in Purchase Consideration, the return of R264 million net cash to be retained by Aveng, the payment of an
accumulated ticking fee equal to R75 million and the refund to Aveng of R183 million of additional liquidity that
was previously provided to the Business to fund growth in the period after 30 June 2022.

The cash inflow to Aveng is set out in the table below:

 Total cash proceeds                                          R’ million
 Purchase Consideration                                             700
 Net cash retained                                                  264
 Accumulated ticking fee                                              75
 Additional liquidity refund                                        183
 Total cash inflow on closing date                                1 222
 Short term BBBEE loan                                            (210)
 Net cash inflow on closing date                                  1 012

As part of the Purchase Consideration, Aveng is providing a R210 million loan, to a separate company, in order
to subscribe for 30% in the equity of the Business that is reserved for BBBEE participation, for a maximum period
of one year post closing. Interest payable to Aveng on the R210 million loan is 17%, to be paid monthly. The
30% holding is subject to a call option, exercisable at any time within 12 months, for R210 million. This loan will
be recognised by Aveng as a short term receivable and payment to Aveng is secured by a demand guarantee.

The Board wishes to extend its sincere thanks to the management and staff of Trident Steel for their support
and commitment over many years. Trident Steel management have successfully refocused the Business into a
service centre business primarily focused on the automotive sector, improving profitability and returns and well-
positioned for further growth. The Board congratulates management on their successes and looks forward to
learning of future growth and success under new ownership.
Debt management and de-risking the Group

Post the closing of the sale of Trident, the Group’s South African legacy debt has been fully extinguished from
a previous high of R3,3 billion. Specifically, the Transaction proceeds have been partially used to fully settle the
remaining South African legacy debt of R278 million and to fully settle the Trident Steel short-term trade finance
facility of R450 million.

With Trident Steel being a working capital-intensive business, the Transaction has also allowed Aveng to further
de-risk its balance sheet by terminating over R500 million in ancillary trade finance facilities including foreign
exchange, promissory notes and letters of credit.

Since December 2022, the Group continued to reduce performance guarantees to R136 million.

At the Moolmans subsidiary, having successfully secured a new contract at Tshipi é Ntle, Moolmans has
committed to invest c.R900 million in new equipment. Asset backed finance has been secured to fund this
investment. The equipment is being delivered over an extended period and to date Moolmans has recognised
R313 million of new debt in respect of this equipment. This asset backed finance facility has a 48 month term.

At the McConnell Dowell subsidiary, following the recent project guarantee call, McConnell Dowell has increased
its debt to R406 million (AUD33 million) having agreed facilities with its Australian bankers. This debt is expected
to reduce by R123 million (AUD 10 million) by June 2023 with the balance to be settled by June 2024.

The impact of the above transactions is set out in the table below.

Pro forma financial information – Net cash and borrowings (excluding IFRS 16)

The pro forma financial information has been provided for illustrative purposes only, to provide information on
how the Transaction has affected the consolidated borrowings of the Aveng Group, excluding IFRS 16, on
closing date and because of its nature, may not fairly present Aveng’s financial position, changes in equity,
results of operations and cash flows after the Transaction. The pro forma financial information has been prepared
on a consistent basis with the Group’s accounting policies, which are compliant with IFRS and consistent with
those applied in the reviewed interim financial statements of the Aveng Group for the six months period ended
31 December 2022. The pro forma financial information has been prepared in accordance with the JSE Listings
Requirements and is the responsibility of the Aveng Board.

                                          31 December          Material           Disposal of       28 April 2023
                                              2022            movements          Trident Steel
 Cash (including overdrafts)                                            R’ million
 South African operations                  94                   (240)                 284                138
 McConnell Dowell                         2 703                 (258)                  -                2 445
 Total Cash (including overdrafts)        2 797                 (498)                 284               2 583
 Borrowings (excluding IFRS 16)
 Credit and term facilities               (353)                    75                 278                 -
 Trade finance facility                   (390)                   (60)                450                 -
 Term debt*                                 -                    (406)                 -                (406)
 Asset-backed finance**                    (2)                   (313)                 -                (315)
 Total borrowings (excl. IFRS 16)         (745)                  (704)                728               (721)
 Net cash position                        2 052                 (1 202)              1 012              1 862
*Term debt relates to McConnell Dowell
**New Asset-backed finance relates to Moolmans
The above pro forma information has not been reviewed or reported on by the company’s external auditors.

Strategy implementation

Aveng announced its strategy in February 2018 to simplify its business, de-risk its balance sheet and reduce its
debt. This required Aveng to reduce from 23 business units to 5 business units and turnaround and dispose of
non-core assets to allow the Group to focus on the core assets of McConnell Dowell and Moolmans. The
completion of the sale of Trident Steel and the settlement of all legacy South African debt marks a pivotal moment
in the successful execution of Aveng’s 2018 strategy. This results in the parent company being debt free,
removes the substantial working capital requirements of Trident Steel and leaves simplified operations with two
operating segments, being McConnell Dowell and Moolmans.

Having achieved this milestone of de-risking the balance sheet and settling legacy South African debt,
management are now entirely focused on the operational performance of both Moolmans and McConnell Dowell.


3 May 2023
Melrose Arch
JSE Sponsor
Investec Bank Limited

Itumeleng Lepere
Manager Investor Relations
Tel: 011 779 2800
Email: investor.relations@avenggroup.com