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Barloworld - Competition Tribunal Approves R1,5-Billion Sale Of Barloworld
Equipment Finance Book
Barloworld Limited
(Registration number 1918/000095/06)
ISIN Code: ZAE000026639
JSE Code: BAW
(`Barloworld`)
COMPETITION TRIBUNAL APPROVES R1,5-BILLION SALE OF BARLOWORLD EQUIPMENT FINANCE
BOOK.
The Competition Tribunal has approved the sale by Barloworld of its equipment
finance book to Wesbank for a consideration of approximately R1.5-billion cash
which is the current net asset value of the finance contracts. This sale was
previously announced on 29 March 2004. The effective date of the transaction
will be 1 September 2004. The final consideration will be based on the net
asset value of finance contracts on that date.
The deal forms part of a smart partnership alliance with Wesbank, a division of
First Rand Bank Limited, in which Barloworld Equipment will receive a share of
the profits flowing from both the existing finance contracts, as well as future
new business flows.
In March last year, Wesbank acquired Barloworld`s motor vehicle finance book for
R881-million.
Tony Phillips, Barloworld chief executive officer, said: `We are pleased to have
concluded these two significant partnerships with Wesbank, which has the
resources to honour existing contracts and the expertise to build on our service
standards. It will remain an important element in the future provision of a
total solution-based offering to our mining and construction customers.`
The deal will have a positive impact on the balance sheet of the group and would
have reduced total borrowings to shareholders funds at 31 March 2004 from 94,5%
to 80,7%. There will be no material effect on earnings or net asset value.
`This alliance is another consequence of our use of Value Based Management to
guide our thinking,` said Phillips. `While long term rentals, often linked with
maintenance contracts, are an integral part of our business models, pure asset
finance is not our core business and is best dealt with by our global network of
partnering financial institutions such as CAT Financial, Hyster Capital,
DaimlerChrysler Services Truck Finance, and Wesbank.`
Barloworld also has a UK-based leasing book of R2.7 billion which primarily
finances its own US and UK long-term lift truck rental fleets. While this
requirement will remain, the relatively small component of the UK-based book
that comprises pure financing transactions will be transferred over time into
partnering financial institutions.
Ends.
Released on behalf of Barloworld Limited by Westcom Public Relations. For
further information contact Mark Drewell, Head of Corporate Communications at
Barloworld on (011) 445 1204, email: mdrewell@barloworld.com
VISIT THE BARLOWORLD WEBSITE: www.barloworld.com
12 August 2004
Johannesburg
Sponsor
Cazenove
Date: 12/08/2004 02:02:04 PM
Produced by the JSE SENS Department
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