Kutana Construction has recently announced it will buy a majority 51% stake in Aveng subsidiary Aveng Grinaker-LTA. Aveng Grinaker- LTA is the largest construction group in SA by turnover servicing infrastructure, energy, rail and mining markets in Africa.
Kutana Construction is a 100% black women-owned and led investment group focused on delivering significant shareholder value whilst contributing to the transformation of the economy and society at large.
Kutana invests in industries with long-term investment horizons and the construction industry is one such sector in which they see significant long-term opportunity and growth. They have recently acquired a majority stake in Steeledale a naturally synergistic business to the construction industry. This acquisition is their second in the construction sector and one seen as critical to the long term investment strategy in this sector for Kutana
Ms. Thoko Mokgosi-Mwantembe, CEO of the Kutana group of companies, commented: “Our acquisition of a substantial shareholding in Aveng Grinaker-LTA forms part of our construction investment strategy. Our objective is to not only to grow the overall business through our strategic relationships but provide real empowerment to the communities in which we work. We will seek to create opportunities for emerging black contractors into the market as well develop and attract black professional and management skills in the construction sector”
Kobus Verster, chief executive officer of Aveng commented “This agreement will create a competitive advantage for our construction business and sets the platform for growth and sustainability for Aveng within the South African construction industry,”. “Aligning Aveng’s strategy with the government’s economic transformation agenda will further the development and transformation of the South African construction industry.”
“Through this transaction, Aveng will create an enabling framework for compliance with the transformation-related obligations contained in the settlement agreement with government” said Verster
This agreement commits six of the country’s largest construction and engineering groups to collectively pay R1.25bn (US$87.3mn) over 12 years into a trust fund to accelerate transformation in the sector, in settlement of collusion claims in the industry.
The purchase price, to be settled in full by 2020, is capped to a maximum amount of R756m (US$52.8mn), with a floor-price based on the fair value of the business at that future date.
Kutana CEO Thoko Mokgosi Mwantembe said “Empowerment of the construction sector has become crucial for its survival. We believe this transaction with Aveng will play a major role in achieving the industry and governments transformation objectives.”