TRANSPACIFIC SELLS COMMERCIAL VEHICLES GROUP
Written on the 29 July 2013
TRANSPACIFIC Industries Group Ltd (ASX:TPI) shares today rose slightly at news of the sale of its Commercial Vehicles Group.
The sale valued $219 million to Penske Automotive Group Inc should be completed by September 30 this year.
A net profit of about $85 million will result from the sale and be recognised as a significant 2014 financial year event for TPI.
The company said debt would be paid down annually via proceeds from the sale, which should create net savings on interest of about $12 million.
TPI CEO Kevin Campbell (pictured) says the sale of the "non-core" asset is a positive part of changes to the company and would strengthen its balance sheet.
"Combined with the sale of other non-core assets over the past twelve months, the company will have realised total proceeds of approximately $250 million," says Campbell.
TPI's shares rose about five per cent to a high of 92 cents per unit after the announcement and finished up at 87 cents, a 6.7 per cent increase on the previous day's close.