Aveng has sold the shares it owns in property holding and investment company Dimopoint to Collins Property Group, for R96m in cash.
The transaction, executed through its unit Aveng Africa, is effective from December 1.
JSE-listed Collins is a property development and investment group with a history spanning four generations over a period of more than 100 years and predominantly owns and manages properties throughout Africa and the UK.
Aveng disposed of its property portfolio to Dimopoint in 2015, with group companies as the principal tenants. At that time, Aveng retained a minority holding of 30% with Collins as the majority shareholder. The investment in the property portfolio is being disposed of in line with the strategy to dispose of non- core assets, it said in a statement on Monday.
The transaction will result in the termination of the head lease agreement between Aveng Africa and Dimopoint, the settlement of rights and the release of all obligations and liabilities associated with the head lease agreement. Moolmans has entered into a lease with Dimopoint for the property that it occupies on substantially the same terms and conditions.
All conditions precedent have been met and the transaction is expected to close on December 2.
The transaction is cash accretive by R96m and will improve earnings before tax by about R82m, Aveng said.
The termination of noncore leases is expected to result in a modest future cost saving, it added.
The proceeds from the sale will be used to strengthen Aveng's financial position and will contribute to the execution of the strategy announced in August, by adding to the liquidity and earnings for shareholders, while allowing management to focus on delivering its strategy of improving shareholder value through increased focus on its operating brands of McConnell Dowell, Built Environs and Moolmans, Aveng said.
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