To view the PDF file, sign up for a MySharenet subscription.

ONELOGIX GROUP LIMITED - Disposal of Postnet

Release Date: 15/12/2014 07:05
Code(s): OLG     PDF:  
Wrap Text
Disposal of Postnet

ONELOGIX GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/004519/06)
JSE share code: OLG ISIN: ZAE000026399
(“OneLogix” or the “group”)


DISPOSAL OF POSTNET


INTRODUCTION

Shareholders are advised that OneLogix, through its wholly owned subsidiary OneLogix (Proprietary)
Limited, has concluded an agreement to dispose of its 100% shareholding in PostNet Holdings
Proprietary Limited (“PostNet”) to Aramex (UK) Limited (“Aramex”) for a disposal consideration of
R190 559 000 (the “transaction”).

RATIONALE FOR THE TRANSACTION

Over the past ten years, the investment focus of OneLogix has primarily been within, what is known
as, the Logistics Services segment of the group’s business, which presently contributes some 85% of
the group’s earnings.

This segment has experienced the majority of the group's: acquisitive activity (RFB Logistics, United
Bulk, Madison's and OneLogix Projex Cargo Solutions), start-up business initiatives (Commercial
Vehicle Delivery Services, OneLogix Projex and OneLogix Linehaul) and the bulk of the group's
capital allocation to existing businesses (in terms of expansion and maintenance of fleet, property
development and maintenance, IT systems, hardware expansion and the employment and training of
staff).

It is therefore not surprising that the core competencies of the group are to be found in this sphere of
long distance transport and particularly in specialised long distance transport. These competencies
include optimising fleet performance and other related operational skills such as workshop
optimisation, fuel, tyre and spares procurement, driver management, vehicle storage and all manner of
supportive control systems. Courier and express parcel delivery is a specialised area of logistics which
OneLogix had chosen to exit several years ago. Courier and express parcel distribution is a significant
component of PostNet’s product mix, which demands further specialist skills relating in particular to
retail and last mile delivery logistics. These are skills currently that fall outside the core focus of the
group.

This scenario poses a serious risk to both OneLogix and PostNet in terms of potential vulnerability in
correctly anticipating consumer requirements and competitive activity.

PostNet will be better suited to be within an environment that offers a dedicated focus on the
imperatives of its retail requirements. OneLogix on the other hand would be better suited to relinquish
its shareholding in a business where it cannot add real value and where this would also enable it to
concentrate on acquisitive and organic activity within the specialised logistics arena.

Aramex offers customers around the world transportation solutions that range from international and
domestic express delivery, freight forwarding, publication distribution, specialised shopping services,
logistics and warehousing.

TERMS OF THE TRANSACTION

The transaction is immediately effective and is not subject to any outstanding conditions precedent.

The disposal consideration for the transaction has been settled in cash and is subject to potential
downward adjustment, once determined, as follows:

-   if the net working capital at the effective date is a negative amount, the disposal consideration will
    be reduced by an amount equal to such negative amount; and
-   if the net tangible asset value at the effective date is less than R5 000 000, then the disposal
    consideration will be reduced by an amount equal to such shortfall.

The agreement provides for warranties and indemnities that are normal for transactions of this nature.

APPLICATION OF THE SALE PROCEEDS AND FINANCIAL INFORMATION

OneLogix intends to use the proceeds from the transaction for purposes of paying down short-term
debt of approximately R33 million and the balance to fund the group’s growth through acquisitions
and investing in organic initiatives.

The net asset value attributable to PostNet at 31 May 2014 (being OneLogix’s latest year end) was
R6.4 million. The net profit after tax attributable to PostNet for the year ended 31 May 2014 was
R10.6 million.

CATEGORISATION OF THE TRANSACTIONS

The transaction is a category 2 transaction in terms of the JSE Listings Requirements and accordingly
does not require shareholder approval.
15 December 2014


Corporate advisor and sponsor
Java Capital


Legal advisor
DLA Cliffe Dekker Hofmeyr
Date: 15/12/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story