Automotive Holdings Group (AHG) has entered into a binding agreement to sell its refrigerated logistics business – comprising its Rand, Harris, Scott’s and JAT operations – to CC Logistics (Australia), a wholly owned subsidiary of HNA Group, for $400 million.
The sale will comprise approximately $280 million in cash, and the acquisition by HNA of approximately $120 million in finance lease liabilities associated with the refrigerated logistics operations.
“AHG has previously announced it would explore all opportunities to maximise shareholder value from the refrigerated logistics business,” said David Griffiths, Chairman, AHG. “Although the restructuring initiatives are delivering a significantly improved financial performance, the sale provides AHG with the opportunity to realise a certain value for shareholders that reflects this continuing improvement.
“The sale also provides AHG with both the resources for further growth in our automotive operations and scope for capital management.”
John McConnell, CEO and Managing Director of AHG, added, “HNAI has indicated a commitment to growing and continuing to invest in the refrigerated logistics sector, both internationally and in Australia.”
Stephen Cleary, the current CEO of AHG Logistics, will remain in his role with the refrigerated logistics business and will be supported by the existing management team and employees of the business.
Completion of the transaction is expected to occur in the first half of 2018, and remains subject to the satisfaction of regulatory approvals and to other customary conditions precedent.
The sale of its refrigerated logistics operations is not expected to have any material impact on AHG’s automotive retail division or non-refrigerated logistics operations.