Imperial split on track

Imperial Holdings CEO Mark Lamberti will push ahead with his plan to split the company next year unless political turmoil in SA or a sovereign rating downgrade force a delay.

A planned separation of the vehicles and transportation businesses into two Joburg-listed entities “is taking up 30% of top management’s time”. The company will start the process next year unless “the market goes to hell, then we obviously have to say the situation is not appropriate”.

Preparing Imperial for a split has been a main focus of Lamberti’s since he took the helm in 2014 and concluded that the company was made up of two distinct divisions without any operational overlap. He’s since reorganised the businesses through disposals and acquisitions and set up separate management teams.

He plans to leave Imperial either at the time of the unbundling, or else after delivering full-year earnings figures in about August 2018.

“In terms of what this business should be, it should be two separate businesses,” Lamberti said. “They should be listed, they are large enough to stand on their own. Our major investors have all confirmed that is the way they feel.”

Imperial shares have increased 6.9% this year, valuing the company at R39 billion. That compares with a 10% rise on the FTSE/JSE Africa AllShare Index.

Political uncertainty The two divisions, the auto business and the logistics arm, are only held together by Imperial’s balance sheet and a separation would allow each business to seek debt and equity independently, the CEO said.

Both units would be listed on the stock exchange, while it may make sense for the “increasingly global logistics business” to consider an additional overseas listing at a later time.

Imperial said last month it would announce the form and timing of the separation by August next year, at the time of its results presentation for the year through June 2018.

Lamberti has overseen the sale of 42 businesses and 52 properties as of the end of June and the disposal drive is largely completed, he said.

Recent acquisitions have included the UK’s Pentagon Motor Holdings for R493 million. – Bloomberg