DURBAN - Industrial company enX Group nosedived more than 30percent on the JSE yesterday after flagging that the R3.1 billion sale of its Eqstra Fleet Management and Logistic subsidiary to the Bidvest Group fell through.
The group said the transaction fell after failing to meet the final outstanding condition of regulatory approval by the Prudential Authority by the long stop date of May 4.
“enX could not reach an agreement with Bidvest to extend the long stop date to allow sufficient time for the Prudential Authority to complete its process, which was well advanced. Accordingly, the subscription agreement concluded between enX and Bidvest on July 12, 2019, has not become effective,” enX said in a statement.
The two companies entered into an agreement in July 2019, whereby Bidvest would acquire 100 percent of Eqstra Fleet Management and Logistics subject to approval from enX shareholders, the Prudential Authority and the Competition Commission.
EnX said its shareholders gave the transaction a green light and supported the divestment of its ownership interest in the business to Bidvest in November last year.
enX operates three segments: Fleet, Equipment and Petrochemicals.
The Eqstra Fleet provides a full spectrum of passenger vehicle services including leasing, fleet management, outsourcing solutions, maintenance, warranty management and vehicle tracking solutions.
The segment also provides fleet management solutions for commercial vehicle fleet owners and logistics solutions with footprint in South Africa and sub-Saharan Africa.
Bidvest initially targeted the end of 2019 to conclude the transaction, saying it would house it in one of its divisions.
Bidvest, a services, trading and distribution group, has six reporting divisions which include Services, Freight, Branded Products, Commercial Products, Financial Services and Automotive.
enX also provided a trading update and said the majority of its businesses have been able to trade, but at lower capacity and revenues levels since the lockdowns in South Africa and the UK commenced.
“We believe that the gradual easing of lockdown restrictions that commenced on May 1 in South Africa will begin to lift our activity levels and result in improved revenue streams. We expect new and used equipment sales to remain under pressure, due to the weakening of the rand and slow-down in the economy,” enX said.
The group expects the UK business to start seeing improvements in revenue from mid-May as the lockdown is eased.
EnX shares closed 30.37percent weaker at R3.76 on the JSE yesterday.