PME Africa is selling its train business to Principle Capital Investments (which some people might remember as it used to have a listed fund). PME Africa is selling 100% of the equity of PME’s wholly owned subsidiary, PME RSACO (Mauritius) Limited, the Group entity which holds the Group’s 50% interest in Sheltam Holdings (Pty) Ltd, together with certain intercompany loans, and the disposal of seven C30 locomotives currently owned by PME Locomotives (Mauritius) Limited, for an aggregate cash consideration of $11.5m.
Following the disposal, the Group will continue to own three C30 locomotives. For the payment of $1, PME RSACO has granted to PME Locomotives a put option requiring RSACO to purchase all or any one or more of these three locomotives for $1,416,666 per locomotive at any point during a 90 day period commencing 18 months following the completion of the disposal. RSACO is going to try to find buyers for the locomotives and will give PME Locomotives half of anything it gets above a $1.5m limit for each locomotive.
Principle Capital has a 10.8% stake in PME Africa so is a connected party. Shareholders will need to agree the deal.
Together with anticipated pre-transaction impairments and expected transaction costs, the Transaction is expected to result in a net reduction in the Company’s unaudited net asset value of approximately $17m to approximately $18m.
PMEA : PME Africa NAV halves on sale of train business