Diversified chemicals solutions company AECI has completed the disposal of Schirm USA Inc, the group said on Friday.
The group said all of the conditions for the implementation of the disposal had been fulfilled or waived and it was implemented on Thursday.
The total consideration for the disposal was $60m: $40m in cash and $20m by way of the issue of two convertible secured subordinated promissory notes.
An amount of $40m pertaining to the disposal consideration has been transferred to AECI and will be used in line with AECI’s capital allocation framework, the group said on Friday.
The disposal is in line with AECI’s strategy of optimising its portfolio and creating a platform for growth.
The company plans to focus on its core businesses — AECI Mining and AECI Chemicals — while divesting from managed businesses that offer limited synergies with the chosen core businesses.
“This strategic shift aims to streamline operations, enhance efficiency and leverage in-house expertise by concentrating efforts on areas where AECI has a competitive advantage and strong market potential,” it said.
In July the group reported the headline earnings per share (HEPS) more than doubled in the first half, boosted by growth of its international operations.
HEPS for the six months to end-June were up 132% to 604c and an interim dividend of 100c per share was declared.
Earnings before interest, tax, depreciation and amortisation (ebitda) from continuing operations increased 24% to R1.58bn.
CEO Holger Riemensperger said at the time of the release of the half-year results that he was encouraged by the growth of the group’s international operations and the continued resilience of its core business, particularly in the face of SA’s challenging operating environment.
AECI Mining’s international operations delivered an improved performance despite the effect of challenging operating conditions and supplier headwinds on its SA-based operations, the group said.
Earlier in July the group sold its food and beverage business to a SA-based private equity fund, as part of a broader effort to optimise its portfolio and focus on core operations.
The deal, which is subject to regulatory approvals, is expected to be finalised before the end of the year. The purchase consideration was not disclosed.
The food and beverage business, which supplies additives, ingredients, and processing aids to the food and beverage industry, will be transferred to its new owners in its entirety, ensuring business continuity for customers and employees.
Riemensperger said previously that the group would use the proceeds from the sale of its noncore business to reduce debt and reinvest into its core business.
In March, AECI sold its public water business, run by its Improchem subsidiary, to a majority black-owned SA special purpose vehicle. The unit, which supplied water treatment chemicals and services mainly to the public sector across Africa, was transferred along with existing partnerships.
With Lindiwe Tsobo
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.