Diversified industrial group enX is to dispose of its lubricants segment for R275.6m, it said on Friday. The transaction will be executed through its units, enX Trading and enX Leasing.
The companies have entered into a sale of shares agreement with Abakhulu Investments, in terms of which enX Trading will dispose its 66% interest, including loan claims, in Centlube, its 100% interest, including loan claims, in Ingwe Lubricants and its 37% interest in Zestcor Eleven, and enX Leasing will dispose of its loan claim in Ingwe, for an aggregate base price of R275.66m.
EnX said in a statement that the disposal represented an attractive opportunity for enX Trading to monetise its investment in the lubricants segment, at a valuation that reflects the prospects and cash flows of the segment and as a single, indivisible transaction.
“The monetary realisation of the sale equity is at a value that exceeds the value reflected in the current enX share price,” it said.
The disposal is to parties that already manage the Zestcor business, have a key supply agreement between Zestcor and Centlube which Centlube is reliant on for base-oil supply, can realise further operational synergies and can unlock further value with the existing management team, it added.
Surplus cash arising from the disposal would be returned to enX shareholders, it said.
Centlube directly controls African Group Lubricants (AGL) which blends and markets oil lubricants and greases in SA and Sub-Saharan Africa and is the sole distributor of ExxonMobil lubricants (excluding marine and aviation) and Quaker Houghton International's advanced fluid solutions and services.
Ingwe owns the CERA blending plant in Boksburg, which is necessary for the blending of lubricants within AGL's operational activities.
Zestcor, an associate of enX, is the only authorised distributor of ExxonMobil base stocks for SA and Sub-Saharan Africa. It specialises in the sales, marketing, procurement and supply of Group I, II and III base oils.
The transaction is subject to conditions, including approval from the SA competition authorities.
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