KAP to sell Unitrans Swazi Holdings for R214 million amid restructuring efforts
Industrial
KAP's transport business Unitrans has disposed of Unitrans Swazi Holdings as part of a broader restructuring of under-performing assets.
Image: Supplied
JSE listed KAP, the diversified South African industrial group, announced Friday it would dispose of Unitrans Swazi Holdings for about R214 million.
KAP is focusing on turning around its underperforming businesses, with the Unitrans division being the largest of these businesses. KAP has made significant management changes in all underperforming businesses and has either restructured or is in the process of restructuring them to support improved future performance and return on capital employed.
On Friday, KAP’s directors said that the fully owned subsidiary Unitrans Africa had entered into a sale of shares and claims agreement with Freight-X, a company incorporated in Eswatini and beneficially owned by Swati citizens, Wayne Levendale and Thomas Albrecht, for the disposal of 100% of Unitrans Swazi Holdings (USH).
KAP said Unitrans had largely completed a comprehensive restructuring of its operations, which focused on the cessation of low-margin, low-return activities, improved asset utilisation, and reduced costs. As part of the review of operations and capital allocation priorities, it was decided to dispose of its operations in Eswatini.
Unitrans intended to retain a strategic presence in Eswatini after the transaction by continuing to pursue agricultural opportunities aligned to its overall strategy.
Unitrans operates its business (other than its agricultural operations) in Eswatini through Southern Star Logistics (SSL), a joint venture formed in December 2017. KAP indirectly owns 50% of the shares in SSL, and the purchaser owns the remaining 50%, which it acquired from SSI in 2020.
Post the disposal, the purchaser will own 100% of USH and its wholly owned subsidiary, as well as 100% of SSL. Proceeds from the disposal would be used by Unitrans as part of capital expenditure to replace existing assets.
KAP’s share price closed 0.61% lower at R1.62 on the JSE Friday afternoon, a price that has fallen steadily by 47.7% since the R3.10 that it traded at 12 months before.
Visit:www.businessreport.co.za