enX Group disposes of subsidiary for R617 million
DURBAN - enX GROUP has entered into a share purchase agreement with Aprolis Holdings for the disposal of its subsidiary Impact Handling UK for £31 million (R617m), with the proceeds expected to be used to reduce group debt.
The Impact Handling UK business provides distribution, rental and value added services for industrial and materials handling equipment in the UK and it is the exclusive distributor for Cat Lift Trucks and Konecranes heavy duty forklifts and container handling equipment in the UK.
The industrial group said yesterday the disposal represented an attractive opportunity for the company to monetise its investment at a valuation that the board believes fairly reflects the future prospects and cash flows of the business.
“The disposal also allows enX to realise its investment in Impact Handling UK at a valuation the board believes is higher than that incorporated in the enX share price,” the group said. The disposal consideration would also strengthen its financial position.
In the year to end August 2020, enX Group reported an 8 percent decline in revenue to R7.21 billion, mainly due to lower activity levels arising from the Covid-19 lockdown restrictions in South Africa and the UK.
Its profit from operations before depreciation and amortisation declined by 6 percent to R1.8 billion.
The transaction was subject to a number of conditions, which included enX shareholders approving the disposal as it was classified as a category 1 transaction in terms of the JSE listings requirements and it required shareholder approval.
The transaction must also be approved by Impact Handling UK’s bankers confirming they would not be terminating Impact Handling UK’s banking facilities as a result of the change of control of the company.
The transactions must also meet all regulatory and statutory approvals for the implementation of the disposal having been obtained from the Competition and Markets Authority of the UK, the Financial Conduct Authority in the UK and the JSE.
The effective date for the disposal was expected to be at the end of June.
The group said the value of the net assets of Impact Handling UK as at the end of August 2020 was R552.2m and it reported a net profit after tax attributable to enX Group of R41.1m.
The group has been trading under a cautionary notice since November 18 last year and following its intention to dispose of its subsidiary, enX Group said caution was no longer required to be exercised when dealing in its shares.
The share price closed 2.23 percent higher at R5.97 on the JSE yesterday.