Diversified industrial group enX has advised shareholders that it has finally completed its divestment from Eqstra Investment and the R1.1bn sale of this fleet management business to Nedbank Group.
The conclusion of the sale rounds off an arduous six-year journey, as enX has been on a bid to exit the business since October 2018, with shareholders bagging a gross special distribution of R5 per share as a result.
Eqstra provides commercial and passenger vehicle leasing services, including fleet management, outsourcing solutions, maintenance and vehicle-tracking solutions.
EnX, which provides industrial and petrochemicals services, had been trying to sell Eqstra after its board decided it could do no more to enhance the operations of the company it bought in 2016.
The first attempt to sell the fleet management business to Bidvest for R3.1bn was approved by shareholders but fell through in May 2020.
Sale price of the fleet management outfit Eqstra to Nedbank Group
— IN NUMBERS: R1.1BN
However, the sale of Eqstra to Nedbank, which received regulatory approvals in April, sees the asset finally sold, with enX having outlined that it believes keeping Eqstra under its wing might restrict the logistics company’s “growth prospects and restrict the returns that can be delivered to enX shareholders”.
“EnX has received the gross proceeds, less R50m, which amount will become payable to enX inclusive of interest accrued thereon, less certain agreed deductions and adjustments to be made per the terms of the repurchase agreement, once the effective date accounts have been audited,” the company said in a statement, adding that the audit was expected to be finalised by no later than the end of August.
— The directors of ENX regard these proceeds as surplus to the operational requirements of ENX
It said R100m of the gross proceeds would be held in escrow for three years from the subscription date, as restricted cash collateral for any claims that may arise concerning any uninsured warranties and indemnities, or for such longer period if there were unresolved claims that arose before the expiry of the three years.
The company said, having received R990m net of retention and escrow amounts, the board had resolved to declare a gross special distribution of R5 per enX share to ordinary shareholders, saying “the directors of enX regard these proceeds as surplus to the operational requirements of enX”.
The deal, first considered by Nedbank’s board in May 2023, will bolster the financial services provider’s fleet management capabilities. This is as a combined Eqstra and NedFleet operation is set to provide an integrated approach to fleet management aimed at providing better quality, cost and scale to their joint clients.
Simultaneously, the transaction will expand Nedbank’s product and services offering in Namibia and Eswatini, while expanding Nedbank Group’s footprint into a new jurisdiction, Botswana.
EnX shares were up 3.26% to R9.50 on Thursday afternoon, rising over 27% in the last year.
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