Johannesburg - Imperial Holdings is selling its 65 percent stake in Neska to Cologne’s port authority as the unit’s growth prospects are limited.
In a statement to shareholders on Monday, Imperial said it would sell its stake for 75 million euros - or about R1.2 billion - to the current minority shareholder, Häfen und Güterverkehr Köln (HGK).
Neska provides intermodal container and trailer logistics, connecting the major North Sea ports and the European hinterland. It has trimodal terminals along the River Rhine as well as a container shipping line and operates via 23 sites. The company falls under Imperial’s Logistics International unit, which is the listed company’s holding company for its non-African international logistics operations.
However, the business is facing growing competition from established players with more scale, a better market positioning and pricing power, says Imperial.
“As a result, Neska’s growth prospects under Imperial’s ownership are limited and the value of Neska will be better
advanced by owners with established capability and scale such as HGK.”
Neska, which Imperial sees as non-core, delivered operating profit of 7.2 million euros, or R110 million, in the year to June and has a net asset value of 14 million euros.
Imperial, which specialises in logistics, employs around 52 000 people who generate revenues in excess of R100 billion a year in Africa, Europe, South America, Australia and the US through five major divisions.
The deal, which will see HGK also pay off shareholder loans of 24 million euros, will be effective from July, but is subject to customary conditions, says Imperial.
The Johannesburg-listed company says it will use the net proceeds to expand its core business and trim short-term debt.
IOL