Johannesburg - Barloworld, the listed distribution group, has sold its Australian motor retail operations for R1.3 billion.
This followed a decision by Barloworld last year to exit the Ferntree Gully dealership in Australia, which was effective from October 31, and the group advising shareholders last month it was at an advanced stage in negotiations for the disposal of its entire motor retail operations in Australia.
It said yesterday it had sold the remainder of its successful Australian motor retail interests to a company owned by Nick Politis, an Australian automotive businessman.
The transaction was effective from Monday.
The sale of the business is in line with Barloworld’s strategic initiatives to position the company for future growth and has resulted in a review of the group’s overall portfolio of businesses with intentions to reallocate capital to higher-return opportunities over time.
In line with this strategy, Barloworld sold its handling businesses in the US and UK in 2012, disposed of its handling business in Belgium in its previous financial year to realise cash proceeds of e7.5 million (R109.4m) and was progressing with the sale of the shares in its handling business in the Netherlands.
Clive Thomson, the chief executive of Barloworld, said in November when the group released its annual financial results that it continued the strategy of allocating capital to higher-returning businesses and was successful in concluding a number of important acquisitions and disposals in the period.
“These will position us well for the future and we expect to make further progress in the year ahead,” he said at the time.
Barloworld Motor Australia operated seven dealerships in the Melbourne and Sydney areas representing the Holden, Mercedes-Benz and Volkswagen (VW) brands.
The business increased its operating profit by 15 percent to R146m in the year to September on the back of strong performances in its Mercedes-Benz and VW dealerships during a period when the Australian industry’s new vehicle sales grew by 3.3 percent in the calendar year.
Barloworld said yesterday that the Australian motor retail transactions were concluded at net asset value plus a premium for goodwill and realised combined net proceeds after settling outstanding debt of about A$130m (R1.3 billion).
It said the cash would be used to reduce Barloworld’s group net debt in the short term and to fund strategic growth opportunities in the medium term.
The disposal was below JSE thresholds and Barloworld indicated that its announcement about it was for information purposes only.
Barloworld’s share price gained 0.76 percent to close at R111.11 on the JSE yesterday. - Business Report