| Fri 16 May 2008, 14:43 | | IPL - Imperial - Update On Progress Regarding The |
|
IPL
IPL
IPL - Imperial - Update On Progress Regarding The Group`s Strategic Initiatives
And The Current Trading Environment.
Imperial Holdings Limited
Registration number: 1946/021048/06
Share code: IPL
ISIN: ZAE000067211
("Imperial" or "the group")
UPDATE ON PROGRESS REGARDING THE GROUP`S STRATEGIC INITIATIVES AND THE CURRENT
TRADING ENVIRONMENT.
Imperial announced in August 2007 that the group`s portfolio of businesses was
being reassessed in pursuit of the optimal business mix, given the economic
outlook, the cost of capital and our proven skills. To this end, the allocation
of capital and the strategic focus of the group were to be addressed.
In the past month, two of the primary objectives which we set ourselves were
achieved with the unbundling and listing of the group`s leasing and capital
equipment division under the name Eqstra Holdings Limited (Eqstra) and the
announcement of the sale of the group`s 65% interest in Tourism Investment
Corporation Limited (Tourvest). The Tourvest sale remains subject to regulatory
approval and the successful completion of a scheme of arrangement and sanction
by the High Court, but the irrevocable support of the requisite percentage of
shareholder votes has already been secured.
The third objective, namely the sale of the aviation division has been partly
completed with the disposal of the European aircraft leasing business, Air
Contractors Limited. The disposal of the South African aviation businesses is a
complex transaction which is ongoing. Certain residual aviation assets may
continue to be owned for a set period but not operated.
The distribution agreements of the loss making commercial vehicle business have
been terminated and the disposal of surplus assets is in progress.
As a result of these actions, Imperial is now a more focused group engaged in
logistics activities in Southern Africa and Europe, car rental and tourism, and
motor vehicle distribution,retailing and related financial services.
The group`s balance sheet has been significantly strengthened by the unbundling
of Eqstra as R4.8 billion of debt has been repaid. An amount of R1.8 bn of
equity has been transferred to Eqstra. The sale of Tourvest is expected to take
effect after the year end of 30 June 2008, and the net proceeds are expected to
be approximately R1 billion of which the profit on the disposal would be
approximately R500 million after capital gains tax. The resulting balance sheet
position of the group will facilitate a more progressive attitude to expansion
than was the case during the past two years.
Imperial stated in the circular to shareholders on 20 March 2008 that it was
evaluating options in respect of its residual holding in Eqstra which it would
receive as a distribution in respect of its treasury shares. The company does
not anticipate disposing of its interest in Eqstra for a period of at least one
year and any sale of such shareholding is likely to be in the form of a "block
trade".
Trading conditions in the motor vehicle market are currently very challenging
due to the downswing in the consumer cycle driven by higher interest rates,
which are expected to remain high for longer than originally anticipated.
As previously advised, we have been considering the future of Multipart, our UK
parts ditribution business. This business will most likely be sold or
discontinued, which will result in a loss.
Despite the tougher economic environment the logistics and car rental and
tourism divisions continue to trade satisfactorily.
Financial year end reports will be prepared on the basis that the unbundled
Leasing and Capital Equipment division and Multipart will, in addition to
Tourvest, the Aviation division and the commercial vehicles business, be
classified under discontinued operations, and the prior year results will be
restated accordingly.
16 May 2008
By order of the Board
Company Secretary
RA Venter
BEDFORDVIEW
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 16/05/2008 14:43:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
