JOHANNESBURG Feb 9 South African construction
firm Group Five will buy a further 10 percent stake in
Hungarian road concession company Mecsek for 125.16 million rand
($9 million), it said on Thursday, seeking to source and
participate in further global concessions.
Group Five will sell on its 49.99 percent stake in Mecsek's
motorway concession to Aberdeen Infrastructure Funds (AIF), a
wholly owned subsidiary of Aberdeen Asset Management PLC
, for 62.57 million rand.
Group Five and Aberdeen began a strategic equity partnership
in December after buying a 49.99 percent stake in Intertoll,
which houses Group Five's main European investment and
concession assets, for 633.2 million.
Group Five said the joint venture gives access to
infrastructure investments in Europe, the United States and
It said it will fund the acquisition using cash proceeds
from the Intertoll transaction.
Mecsek is a road concession company in Hungary set up in
2007 to design, build, finance and operate the M6 phase 3, an 80
km (50 mile) motorway in southwest Hungary.
Group Five and Aberdeen will jointly hold the additional 10
percent stake in Mecsek, split 50.01 percent and 49.99 percent.
In a separate statement, Group Five said it expects to
report a headline loss of between 300 cents per share and 320
for the six months to December 2016, citing a 255 million rand
settlement with the South African government.
Shares in Group Five were down 8.76 percent to 22.72 rand at
Seven construction companies 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, after antitrust authorities imposed a penalty on
the sector in 2013 for collusion in tendering processes.
Results were also affected by continued weak trading
conditions, contract losses and subdued tendering activity in
the mining and oil and gas sectors, which has placed projects
under continued pressure.
($1 = 13.4050 rand)
(Reporting by Nqobile Dludla; Editing by Ruth Pitchford)