South African construction group Aveng has ended talks to sell its steel arm , Chief Executive Kobus Verster has confirmed. The CEO cited failure to reach agreement on price as the main reason.
Consequently,Mr Verster said that the firm will now focus on strengthening the Aveng Trident Steel business to stay afloat and remain competitive.
“With the termination of negotiations, we are intending to further strengthen Aveng Trident Steel, including capitalising on its leading position within the automotive sector,” he said.
Verster also said that the conclusion of a long-running dispute in relation to claims on the Australian Queensland Curtis Liquefied Natural Gas (QCLNG) Export Pipeline project has resulted in a cash inflow to the group of 508 million rand ($39 million).
On settlement of the QCLNG award the group will significantly reduce net debt by 508 million rand, the company said. As at June 30 the group’s net debt was 1.07 billion rand.
Work for South African construction industry has slowed sharply. Government contracts stalled and weak commodity prices have hit demand from the mining industry. Companies have had to employ new strategies to survive in a sector stunted by an economy that is not stagnant.