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Press Release by Mainfreight Limited at 12:49 pm, 02 Apr 2007
Mainfreight Limited (Mainfreight) today confirmed that it had reached
conditional agreement to sell its Pan Orient Project Logistics business and
its 75% interest in LEP (New Zealand and Australia) to global logistics
company Agility Group for A$83 million and subject to closing adjustments
in relation to working capital. The purchase price will be paid in full on
completion of the sale with A$1.5 million to be held subject to an escrow
arrangement and payable in instalments if certain project contract targets
are met.
Pan Orient is an Australian-based business specialising in the supply of
logistics services to large projects in Australia and Papua New Guinea, in
particular within the mining sector. It was acquired by Mainfreight as
part of the Owens Group acquisition in 2003. It is the last of the non
core Owens businesses to be sold.
LEP is an Australasian-based freight forwarding business, owned 75% by
Mainfreight and 25% by Agility. A significant proportion of the freight
handled by LEP is sourced from the expanding Agility network and it became
increasingly apparent that its logical owner was Agility. The funds
released from the sale will be used by Mainfreight to fund its ongoing
international expansion.
Mainfreight is satisfied that this transaction fairly reflects the
underlying value of both businesses and will provide ongoing employment and
growth opportunities for the people employed.
For technical reasons the sale is a related party transaction for the
purposes of NZSX Listing Rule 9.2 and NZX Regulation has granted
Mainfreight a waiver from the requirement to obtain shareholder approval
under NZSX Listing Rule 9.2 in relation to the sale. NZX Regulation has
made or will be making a separate announcement of that waiver decision.
The sale is conditional on any necessary government approvals, consents
being obtained under two joint venture arrangements, Mainfreight entering
into a transitional services agreement to provide LEP and Pan Orient with
ongoing transitional information technology and other services and
administrative support and certain key employees remaining in employment
with the business.
The transaction will be completed on the business day before Mainfreight's
accounting cut off date in the month in which the conditions are satisfied.
ENDS
