AHG to sell its logistics business for $400m

Automotive Holdings Group

Automotive Holdings Group

The sale announcement, a day out from AHG's annual meeting, ends more than a year of speculation about the business unit and refocuses the group on its core auto sales operations.

HNA Group (International) wholly-owned subsidiary CC Logistics (Australia) will acquire AHG's refrigerated logistics business, which includes the operations of Rand, Harris, Scott's and JAT (Refrigerated Logistics).

The auto and truck dealership owner said HNA subsidiary CC Logistics will pay $280 million in cash and assume $120 million of finance lease liabilities for the Rand, Harris, Scott's and JAT businesses.

Refrigerated Logistics is engaged in the development of cold storage facilities, fleet investment and multiple strategic acquisitions in the last five years.

"AHG has previously announced it would explore all opportunities to maximise shareholder value from the refrigerated logistics business", said David Griffiths, Chairman, AHG.

CEO of AHG Logistics Stephen Cleary will remain with the refrigerated logistics business and will be supported by the existing management team and employees of the business.

"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 parties have entered a binding agreement but the deal is still subject to regulatory approval and "other customary conditions" with completion of the transaction expected to occur in the first half of 2018, according to Automotive Holdings.

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