Automotive Holdings Group (AHG) will sell its refrigerated logistics business to HNA International.
The $400 million sale follows an unsolicited offer, and will include the Rand, Harris, Scott’s and JAT operations.
The sale includes $280 million cash and approximately $180 million in finance lease liabilities associated with the refrigeration logistics business.
The transaction is expected to be completed by the end of 2018 financial year with regulatory approvals pending.
AHG says in a statement it would be eligible to receive a significant break fee if the agreement terminates from HNA failing to gain approvals, and vice versa.
AHG also says the unexpected sale will enable the business to grow its automotive retail division.
John McConnell, AHG’s chief executive and managing director says HNA International will keep the business in good stead.
HNA has indicated a commitment to growing and continuing to invest in the refrigerated logistics sector, both internationally and in Australia,” he says.
“As an experienced participant in the logistics sector, HNA will continue to deliver quality services to customers and we strongly believe that the business will have a very positive future under its new owners.”
Current AHG logistics chief executive Stephen Cleary will remain with the refrigeration logistics business, supporting the existing management team and employees.
For the financial year ending June 30, 2017, AHG’s refrigerated logistics operations turned over approximately $35 million in revenue.
AHG says it intends to explore capital management initiatives with the proceeds of the sale in order to maintain an efficient balance sheet and minimise its overall cost of capital.
It will also provide 12 months of transitional services to HNA, and will not operate a refrigerated logistics business for the next five years once the sale is complete.
