K&S and Scott’s Trans­port reach deal

Merger of listed firm with re­lated pri­vate com­pany goes ahead

Australian Transport News - - Contents -

ASX-LISTED K&S

Cor­po­ra­tion has been in ne­go­ti­a­tions with pri­vately owned Scott’s Trans­port In­dus­tries (STI) to pur­chase the busi­ness, a deal of which has been struck.

Con­firm­ing a bind­ing agree­ment of the deal un­veiled in Novem­ber, K&S will merge STI into its busi­ness from Jan­uary 30, with the com­pany to han­dle STI’s em­ploy­ees, on­go­ing con­tracts and staff en­ti­tle­ments.

Ac­cord­ing to K&S, the deal reached will pro­vide it will ac­cess to a na­tional fuel haulage arm and ex­tra help with gen­eral and in­ter­modal freight.

“STI op­er­ates a gen­eral freight divi­sion and a fuel cartage divi­sion and has a num­ber of blue chip cus­tomers in the man­u­fac­tur­ing, FMCG, and fuel sec­tors,” an ASX state­ment says.

“K&S Cor­po­ra­tion re­gards the pro­posed trans­ac­tion as an ex­cel­lent op­por­tu­nity to fur­ther ex­pand its K&S En­ergy divi­sion through the ad­di­tion of sig­nif­i­cant fuel cartage op­er­a­tions.

“The trans­ac­tion will also pro­vide ad­di­tional vol­ume to K&S Cor­po­ra­tion’s ex­ist­ing in­ter­modal and con­tract lo­gis­tics di­vi­sions.

“The trans­ac­tion will lead to a more com­pet­i­tive and stronger com­bined busi­ness in an in­creas­ingly chal­leng­ing en­vi­ron­ment.”

From an STI point of view, the ASX state­ment says the trans­porter has agreed to: • a “nom­i­nal pur­chase price”

for its as­sets • rent a num­ber of ve­hi­cles to K&S at mar­ket rates for up to five years • with­out obli­ga­tion, sell

rented ve­hi­cles to K&S • al­low K&S to see STI’s

busi­ness fi­nan­cials • pro­duce li­cence and lease agree­ment by land own­ers who are re­lated par­ties of STI for the re­main­der of the trans­port ter­mi­nals cur­rently oc­cu­pied by STI. K&S pre­dicts there will be a ra­tio­nal­i­sa­tion of in­fra­struc­ture to re­duce op­er­a­tional costs and will un­der­take a re­view of STI’s cur­rent op­er­a­tions.

The com­pany says it did not need share­holder ap­proval for the trans­ac­tion.

It adds that “ne­go­ti­a­tions for the trans­ac­tion have been con­ducted by an in­de­pen­dent sub­com­mit­tee of the board of di­rec­tors” and that it “be­lieves that the terms of the trans­ac­tion are fair and rea­son­able in all the cir­cum­stances and are oth­er­wise on arms’ length”.

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