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BAW BAWP
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Barloworld Limited - Sells R1.5 billion (GBP109 million) UK leasing book
Barloworld Limited
Registration number 1918/000095/06
JSE code: BAWP
ISIN: ZAE000026647
("Barloworld" or the "Company")
Barloworld Sells R1.5 billion (GBP109 million) UK Leasing Book
Industrial brand management company Barloworld has concluded a deal to sell
the materials handling equipment lease portfolio held by its industrial
distribution division in the United Kingdom to GE Capital Solutions at book
value of R1.5 billion (GBP109 million). The effective date is 1 November
2006.
Barloworld has been a Hyster dealer for 77 years and currently has a
network of territories which includes eight states in the southeast US, the
United Kingdom, Belgium, the Netherlands and the whole of Southern Africa.
This network makes Barloworld the largest independent lift truck dealer in
the world.
Announcing the sale of the UK book, Barloworld CEO Tony Phillips said:
"This is the fulfilment of our goal to sell our finance businesses which
did not give adequate returns for the group. This transaction follows the
sale of the bulk of our US portfolio in September this year, to GE Capital
Solutions for R546 million (GBP40 million). When that deal was announced we
said we expected to complete the sale of the UK book by the end of the
calendar year and I am pleased to announce that this has been achieved
ahead of schedule. This is a credit to Brandon Diamond, CEO of our
industrial distribution team, and to his colleagues."
Through the deal, GE Capital Solutions will purchase 8,600 contracts from
Barloworld. Other UK leasing assets with a book value of approximately R700
million (GBP51 million) will be retained. These relate primarily to the
company"s long term contracts to provide materials handling solutions to
the UK"s Ministry of Defence logistics operation where Barloworld manages
over 6,000 pieces of materials handling equipment. The leases relating to
these contracts are not assignable in terms of the agreements. The
equipment includes forklift trucks, tractors, trailers and cranes at more
than 600 establishments worldwide.
"This is all about optimising our business and ensuring that we unlock
value where capital is tied up in underproducing assets. There are
specialised institutions that are better able to generate the required
returns from leasing books than we are, and our approach for some time has
been to partner with them rather than using our own balance sheet. GE
Capital Solutions is a major player in this arena and we are confident they
will provide a seamless service between us and our customers as part of our
overall value added offering in the materials handling markets in the
United Kingdom, Belgium and the Netherlands," Phillips concluded.
In 2003 Barloworld sold its R900 million third party South African motor
vehicle finance book to Wesbank, followed by the sale in 2004 of its R1.3
billion South African equipment finance book to the same company.
For more information contact the Barloworld Head of Investor Relations:
Rowan Goeller:
Phone No: +27 11 445 1300
Email rowang@barloworld.com
Sandton
17 November 2006
Sponsor: J.P.Morgan Equities Limited
Date: 17/11/2006 09:18:05 AM Produced by the JSE SENS Department
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