2 Min Read
JOHANNESBURG, March 29 (Reuters) - Shareholders in South Africa's Aveng approved the sale of a 51 percent stake in the Grinaker-LTA business to Kutana Construction, the company said on Wednesday, bringing in a partner owned by black women.
The deal helps Aveng, a 125-year-old company, to align the business with the government's economic agenda and policies aimed at transforming the South African construction industry and giving black people a more prominent ownership role.
In October, the construction firm announced plans to dispose of a 51 percent beneficial interest and a 45 percent economic interest to Kutana construction, a black women-owned entity, for 756 million rand ($57 million) to help the business become profitable again and introduce a black partner.
The 51 percent interest represents the legal voting position of the shares held by Kutana, while the 45 percent economic interest represents the benefit attributable to the firm.
Aveng said in a statement majority of shareholders approved the disposal at its general meeting.
Shares in Aveng were up 1.29 percent to 7.04 rand at 1046 GMT.
With rising unemployment, the ruling African National Congress is under increasing pressure to address gaping inequality that persists 23 years after the end of apartheid.
Black South Africans make up 80 percent of the 54 million population, yet most of the economy in terms of ownership of land and companies remains in the hands of white people, who account for around 8 percent of the population.
Aveng was one of seven construction companies which agreed in October to contribute a total of 1.5 billion rand over the next 12 years towards a fund to develop skills in the sector and give black workers a bigger role. ($1 = 13.0988 rand)
Reporting by Nqobile Dludla; Editing by Keith Weir