January 17, 2018

US$ 600 m Eqstra-enX deal sealed as final approvals received

Eqstra Holdings Limited has reported its last set of annual results as a combined industrial group following overwhelming support by shareholders and noteholders in favour of a R7.8 billion transaction with enX Group Limited. The Competition Tribunal has also approved the transaction.

The transaction with enX, first announced on 30 June 2016, involves the proposed sale of Eqstra’s Fleet Management and Logistics and Industrial Equipment divisions to enX, whilst its Contract Mining division remains listed.

Noteholders approved the proposed amendments to the terms and conditions of the outstanding notes on 22 July with 85.81% voting in favour of the transaction. On 22 September 2016, 91% of shareholders voted for the proposed disposal of Eqstra’s Fleet Management and Logistics and Industrial Equipment divisions to enX in exchange for enX shares. The Contract Mining and Plant Rental division will be recapitalised with a cash injection of R1.4 billion and new borrowing facilities. Eqstra Holdings will be rebranded as eXtract Group Limited.

The  results announcement covers the 12 months to 30 June 2016.

Commenting on the results, Eqstra CEO, Jannie Serfontein, said:

“This set of results confirms the rationale for the transaction with enX. As we have always maintained, the underlying fundamentals and performance of each of the respective divisions is sound. The change in capital markets and the need to evolve our funding strategy to position Eqstra for long-term sustainability requires us to appropriately match our gearing to the long-term nature of associated capital equipment investments.”

For the year under review, the group reported a loss of R2 253 million compared to a profit of R254 million in the prior year.

The Contract Mining and Plant Rental division remained focused on improving operating profit, reporting a 45.2% increase in operating profit over the prior year. The current year’s results were impacted by leasing asset impairments of R536 million (2015: R79 million), excluding assets classified as discontinued operations. The division reported a loss of R463 million (2015: R130 million loss) and remains the group’s only continuing operation.

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