South Africa

KAP wants R6 billion for Unitrans

KAP is considering a sale of the logistics operations of its Unitrans unit as part of plans to reduce the debt of the South African industrial company, according to people familiar with the matter. 

The group, based in Stellenbosch, near Cape Town, is seeking as much as R6 billion ($317 million) for the business, said the people, who asked not to be identified as the information is private.

KAP has held talks with private equity firms, although the preferred structure of the deal hasn’t been agreed and a buyer has not been identified, they said. 

A spokeswoman for KAP said the company could not comment in its closed period ahead of financial results due on Feb. 28. 

KAP, a former unit of Steinhoff International Holdings NV when it was hobbled by an accounting scandal just over six years ago, said in its most recent financial statements that a review of its portfolio is underway.

The plan is to exit low-return or strategically misaligned businesses, the holding company said.  

Transport and logistics firms in South Africa are facing significant operating challenges due to deteriorating infrastructure and persistent power cuts.

Any signs of improvement in the performance of state-owned firms such as rail and ports company Transnet and power utility Eskom could improve the outlook for potential buyers of Unitrans.

Unitrans, one of the largest transport and logistics businesses on the continent, is cutting costs and consolidating its South Africa, rest of Africa and passenger units into a single business, said the people. A deal could include selling all these units or a stake, they said. 

Outside of South Africa, Unitrans also operates in countries including Madagascar, Tanzania and Zambia, according to its website.