It is anticipated that the unbundling of the Imperial group will be implemented in the fourth quarter of this calendar year, says Imperial acting CEO Mohammed Akoojee.
Speaking at the company’s annual results announcement in Johannesburg on Tuesday, he said Imperial Holdings would be renamed Imperial Logistics upon the implementation of the unbundling, “because the entity being unbundled is Motus”.
Motus encompasses all things motoring in the Imperial group, from vehicle sales to aftermarket parts, while Imperial Logistics has a number of local and global supply chain interests.
The unbundling was put on the table soon after former CEO Mark Lamberti joined as company boss in 2014.
Akoojee said there existed no operational synergies between Imperial and Motus, with the companies operating independently in markets and geographies that were vastly different. Both businesses also had different strategic focuses and priorities.
He added that Motus was a vertically integrated business, focused mainly on South Africa, while two-thirds of Imperial Logistics’ business was outside South Africa.
Akoojee believed shareholders could realise long-term benefits from two separate companies focused on their various core businesses.
“We have not had major pushback from shareholders on the unbundling.”
He said Imperial Logistics and Motus had achieved appropriate, self-sustaining capital structures, each with a net debt:equity ratio of 50% at June 30.
Imperial is currently in the process of negotiating with funders to secure the appropriate debt facilities for each division. This should be completed at the beginning October.
The appropriate legal structures for both entities have already been finalised, with the transfer of the group’s automotive interests to Motus Holdings complete.
An Imperial circular and Motus prelisting statement will be circulated to shareholders by September 30, with a general meeting for shareholder approval to take place on October 30.
Imperial posted record group revenue of R128.7-billion for the year ended June 30, up 11% on the previous financial year. Operating profit increased by 6%, to R6.4-billion.
Imperial Logistics saw revenue grow by 3%, to R51.4-billion, with operating profit up 3%, to R2.9-billion.
Revenue at Motus increased by 17%, to R77.7-billion, with operating project growing by 9%, to R3.6-billion.
About 68% of Imperial Logistics’ revenue and 67% of operating profit came from operations outside South Africa.
About 31% of Motus revenue and 14% of operating profit came from outside South Africa.
Akoojee said Imperial Logistics would look for organic and acquisitive growth globally and locally, while Motus was likely to remain a largely South African business.
Akoojee is acting as CEO while Osman Arbee is on medical leave.
Arbee was expected to be back at work in January, when he will take up the position as Motus CEO, confirmed Akoojee.
Arbee suffered a minor stroke after undergoing surgery in June.
Imperial Logistics will be headed by Marius Swanepoel until Akoojee takes over the role in 2019.