Construction sector: woes of a feast or famine industry
With no restoration of stability ‘and sanity’ to economic policy, the listed construction sector could go to zero, says analyst
On Wednesday, the day that Murray & Roberts (M&R) announced that it would no longer pursue its bid for construction and engineering group Aveng, the heavily indebted Aveng’s share price remained rooted at 8c a share. M&R’s decision to walk away from the proposed R1bn transaction was a blow to Aveng’s prospects. The deal was a glimmer of hope for Aveng which has debts of R3.25bn. The group has said this debt is unsustainable. The merger with M&R could have been Aveng’s ticket out of misery. Aveng has said that its share price is undervalued. Its value could be enhanced by better performance by its underground and surface mining business Moolman’s and McConnell Dowell, the engineering, construction and maintenance contractor, as well as the disposal of Aveng Grinaker-LTA and Aveng Trident Steel.These days Aveng, the company that built the iconic FNB Stadium, is a shadow of its former self. It closed 12.5% down at 7c a share on Monday. That is a far cry from the record high of R72.92 i...
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