French firm, CFAO has bought a 74.9 per cent stake in Steinhoff’s automotive division, Unitrans. Steinhoff launched the subsidiary to “simplify” its portfolio after becoming involved in a major financial dispute two years ago.
The deal emanates after 8 months of negotiations between CFAO, which is owned by Toyota Tsusho Tosho Corporation and Steinhoff. A local investment group named Kapela Holdings will obtain the remaining 25.1 per cent of Unitrans’ capital.
CFAO is mainly known for supply and logistics services to the local automotive sector. Comparatively CFAO’s presence is relatively small to Unitrans, which holds 18 distributed brands, 6000 employees and 99 points of sale, €1.5 billion in turnover. CFAO is now anticipated to have access to the largest African market for the sale of new vehicles. According to CFAO, it is reported that more than 550,000 units were sold in South Africa in 2018, representing 45 per cent of new vehicle sales on the continent.
A joint statement was made by CFAO CEO Richard Bielle and Unitrans CEO Brynn Stephenson stating, “It is time for Unitrans Motors Group to arrive to a new phase of its development, thus solidification its strategic position in the automotive distribution sector, we have faith that we have many mutual opportunities for our two groups,”
Steinhoff is progressively reducing its debt to cope with a financial malpractice scandal worth €6.5 billion. It has been vending off some of its forty subsidiaries and holdings, in an effort to reestablish its finances.
Steinhoff, was formerly a furniture manufacturer founded in 1964 and later became an international conglomerate, which was listed on the Frankfurt and Johannesburg stock exchanges. And is well known for its presence in Europe, Australia and America.
Steinhoff also announced a few weeks ago that it was selling part of its Australian subsidiary, Greenlights Brand, and 25 per cent of its shares in Pepco, through a public offering scheduled for next year. The Unitrans brand will soon be replaced by CFAO Motors.
Louis du Preez, CEO of Steinhoff stated “the closing of the transaction is one more successful step in the further simplification of the group’s portfolio and the lessening of our balance sheet debt”.