Barloworld Ltd Monday said it will spin off its majority stake in Pretoria Portland Cement Co and return about ZAR1bn, or $143 million, to shareholders in 2007 as part of the South African industrial company’s efforts to tighten its focus.
At the same time, Chief Executive Tony Philips will step down and be succeeded by Clive Thomson, formerly the company’s finance director and currently CEO of the Barloworld Equipment division.
Barloworld said in a statement PPC would be unbundled from the company during 2007, subject to shareholder and regulatory approval and other consents. It said the move would unlock value for its shareholders near-term, and also enhance the tradability and free-float of PPC shares.
Barloworld has recently sold its Steel Tube Division as well as the U.K. and U.S. leasing books of Barloworld Industrial Distribution.
The company added that other disposals are in the works, including part of Coatings Australia and its Scientific Division.
"The restricted tender process to dispose of Melles Griot is at an advanced stage and completion of the deal is expected in the next few months," Barloworld said. "Several options are being considered for the Laboratory business and the chosen option will be implemented in 2007."
The proceeds from the disposals will be returned to shareholders "in an optimal manner" by the end of March, the company said. The return will be in addition to a dividend of about ZAR900 million for the year ended Sept. 30, 2006.
The company said Philips, who has been with Barloworld for 39 years and chief executive for the last eight years, has decided that this is an opportune time to step down from his position as CEO.
Philips also will resign as chairman of PPC, and the company said the intention is to next appoint a black chairman for the cement company.
Both Barloworld and PPC are working on black economic empowerment transactions and the company said equity ownership deals are expected in the near future.