The board of diversified industrial group Barloworld has approved the unbundling of Zeda, its subsidiary that houses its investment in its car rental and vehicle leasing business, it said on Monday.
Zeda, which will now list separately on the JSE, trades under the Avis and Budget brands in South Africa and a further 10 sub-Saharan African countries.
Barloworld group CEO Dominic Sewela said Zeda will benefit from a fully dedicated executive management team directly accountable to a dedicated board of directors.
“This is a bittersweet moment for Barloworld. While we conclude our restructuring and portfolio shift to defensive, relatively asset light and cash-generative industrial sectors, based on a business-to-business operating model, we are also letting go of an incredibly strong business whose adaptability has taken it from strength to strength,” Sewela said.
“This decision was taken in the interest of maintaining value for our shareholders. As two separate companies, each business will be able to operate in a more focused and efficient manner, actively pursuing our growth ambitions in different sectors and verticals.”
If Barloworld also gets the necessary approvals, Zeda will list on the JSE on December 13. The separate listing will see each Barloworld shareholder receive one Zeda share for every one Barloworld ordinary share held.
Barloworld also released a robust set of financial results for the year to September. The group said revenue from continuing operations shot up 15.4% to R39.4-billion from R34.1-billion the [previous reporting period].
Barloworld Equipment southern Africa did the heavy lifting, recording 34.4% growth in machine sales and reporting 19.9% revenue increase to R21.8-billion. The group’s operating profit from core trading activities surged 32% to R5.6-billion.
Sewela said: “I am pleased with the strong set of results we have delivered. As a result of our promise to deliver against our strategy and to focus on capital allocation, Barloworld continues to create value for its shareholders.”
Barloworld, which has been listed on the local bourse since 1941, has a market capitalisation of just above R20-billion.
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