| Thu 13 Dec 2007, 17:30 | | IPL - Imperial Holdings - Update On Restructuring, Asset Disposals, Closure Of |
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IPL IPLP
IPL
IPL - Imperial Holdings - Update On Restructuring, Asset Disposals, Closure Of
CVH, Operations, Trading Statement, Change Of Financial Year End And
Cautionary Announcement
Imperial Holdings Limited
("Imperial" or "the Group")
Registration number (1946/021048/06)
Ordinary share code: IPL & ISIN: ZAE000067211
Preference share code: IPLP & ISIN: ZAE000088076
UPDATE ON RESTRUCTURING, ASSET DISPOSALS, CLOSURE OF CVH, OPERATIONS, TRADING
STATEMENT, CHANGE OF FINANCIAL YEAR END AND CAUTIONARY ANNOUNCEMENT
1. Leasing and Capital Equipment division
Further to an announcement dated 1 November 2007, shareholders are advised
that the investigation into various alternatives regarding the Leasing and
Capital Equipment division, primarily focusing on the potential unbundling
of the division, is continuing.
2. Disposal of Aviation Division
As advised in previous announcements, the group has made a decision to
reduce its exposure to the aviation industry by disposing of its aviation
assets excluding NAC. Agreements have now been reached for the sale of the
group`s interest in Naturelink and for the sale of the Air Contractors
group which is based in Ireland.
In respect of the South African freight and aircraft leasing interests,
Safair and Safair Lease Finance, exclusivity has been granted to one bidder
and final due diligence work is currently being carried out.
Substantial losses will be incurred on the sale of the group`s aviation
businesses, which will be accounted for as a discontinued operation from
the end of November 2007.
3. Disposal of Tourvest
Further progress has been made in respect of the sale process of Imperial`s
66% interest in Tourvest. We do not expect to conclude a transaction before
the end of December 2007 and we will make a further announcement in this
regard during the first quarter of 2008.
4. Discontinuation of commercial vehicle distribution and assembly operations
Reference was made in the announcement of 1 November 2007 that Commercial
Vehicle Holdings (CVH) was continuing to trade at a loss. Imperial has
subsequently reviewed its business model relating to the assembly and
distribution of commercial vehicles and has as a consequence of this
review:
- by agreement with PACCAR, not renewed the assembly and distribution
agreement between CVH and PACCAR Inc in respect of the DAF commercial
vehicle range, which agreement expired on 27 November 2007; and
- reached agreement with International Truck and Engine Corporation for
the termination of the assembly and distribution of International
vehicles.
In both instances, the manufacturers intend to continue the distribution of
their products in South Africa and an orderly handover period towards the
middle of 2008 is underway. To the extent that the Imperial group will
continue as dealers in commercial vehicles of the brands previously
distributed, these dealers will be reported in the group`s Dealerships
division.
As a result of the termination of the distribution agreements, substantial
closure costs will have to be incurred. The distribution and assembly
business will from the end of November 2007 be accounted for as a
discontinued operation.
5. Operational update
The Car Rental and Tourism division has been awarded the franchise to
operate the National Car Rental and Alamo Rent a Car brands in Southern
Africa with effect from 1 April 2008. In addition, the Europcar franchise
agreement has been renewed for an extended period.
Trading conditions remain difficult in the motor retail markets while
slower equity market growth is affecting the investment returns of the
Insurance division. The Logistics, Car Rental and Tourism, and Leasing and
Capital Equipment divisions are performing well.
6. Trading statement
In terms of section 3.4(b) of the JSE Limited Listings Requirements a
company must publish a trading statement as soon as they are satisfied that
a reasonable degree of certainty exists that the financial results for the
period to be reported upon next will differ by at least 20%.
As a result of the combined once off costs relating to the discontinued
operations of CVH and the Aviation businesses, the company`s earnings for
the half year is expected to be between a profit of 150 cents per share and
a loss of 300 cents per share. A wide range is provided as the earnings
impact is still being fully quantified and is subject to a number of
variables. Headline earnings per share for the half year is expected to be
between 15% and 25% down.
The financial information in this trading statement has not been reviewed
or reported on by Imperial`s auditors. This update is based on the
available information at the time of publication.
7. Change of financial year end
For practical reasons Imperial has decided to change its financial year end
from 25 June to 30 June. The group`s interim results will therefore be
reported for the period ending 31 December 2007.
8. Cautionary Announcement
The outcome of the initiatives detailed above may have a material effect on
the price of the group`s securities.
Accordingly, shareholders are advised to continue exercising caution when
dealing in the company`s securities until a further announcement is made.
Bedfordview
13 December 2007
Sponsor to Imperial
MERRILL LYNCH SOUTH AFRICA (PTY) LIMITED
Merchant bank and transaction sponsor to Imperial
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Corporate law advisers to Imperial
TUGENDHAFT WAPNICK BANCHETTI AND PARTNERS
Date: 13/12/2007 17:30:02 Produced by the JSE SENS Department.
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