Barloworld Limited - Barloworld To Dispose Of Its R830 Million South African
Vehicle Finance Business
Barloworld Limited
(Reg no. 1918/000095/06)
JSE code: BAW
ISIN code: ZAE000026639
BARLOWORLD TO DISPOSE OF ITS R830 MILLION SOUTH AFRICAN VEHICLE FINANCE BUSINESS
International industrial brand management company Barloworld today announced the
sale of its third party South African motor vehicle finance book to Wesbank, a
division of FirstRand Bank Limited, for an estimated gross consideration of R830
million. The final consideration will be determined based on the value of the
finance contracts at the effective date.
Commenting on the deal, which is subject to approval by the Competition
Tribunal, the Registrar of Banks and the board of FirstRand Bank, Tony Phillips,
Barloworld chief executive officer, said: "We decided to dispose of this
business because it was neither generating sufficient returns as a stand-alone
business unit due to a lack of economies of scale, nor was it a strategic
component of our product and service offering in motor vehicle distribution."
The company will retain its southern African capital equipment leasing business,
which is a key component of its total solution-based offering to mining and
construction customers and will continue to expand its capital goods financing
business in the UK (materials handling products), US (materials handling
equipment and Freightliner trucks) and Spain (Caterpillar machines, lift trucks
and engines).
Barloworld is one of the world`s leading Caterpillar dealers, the world`s
largest independent lift truck distributor and one of the largest truck dealers
in the United States.
The deal will be effective on the first day of the month following the granting
of approval by the Competition Tribunal. Proceeds from the sale will be used to
retire the external debt used to fund the leases. While the transaction will not
have a material effect on Barloworld`s earnings or net asset value, it will have
a positive impact on the gearing of the balance sheet
Phillips added, "We are pleased to have concluded the disposal to a company of
the quality of Wesbank, who have the resources to honour existing contracts and,
as the acknowledged leaders in vehicle finance in South Africa, the expertise to
maintain or improve on our service standards. This customer offering will be
further enhanced as Wesbank will outsource certain products to its specialist
vehicle management associate company, Avis Fleet Services."
Ends.
For background information please contact Mark Drewell, Head of Corporate
Communication at Barloworld Limited on (011) 445 1204 or visit
www.barloworld.com
15 October 2002
Date: 15/10/2002 08:51:00 AM Produced by the JSE SENS Department
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