K&S Corporation to retain Regal Group's heavy haulage division
Nearly a decade after buying Regal Transport Group, K&S Corporation is offloading the general freight division, with Centurion Transport announced as the purchaser.
An unconditional agreement has been executed for the sale of the Western Australia-based business and “certain assets”.
K&S will still retain the Regal’s heavy haulage arm.
“After considering various options in relation to Regal General Freight, the Board of K&S Corporation elected to undertake this transaction to realise improved shareholder returns and provide ongoing certainty to the Regal General Freight employees and customers,” the company says in an announcement to shareholders.
“The Transaction will allow K&S Corporation to focus on its core competencies, including its Regal Heavy Haulage business, which will continue to be operated and invested in by K&S Corporation.
“K&S Corporation will redeploy (or sell) assets that are not currently generating an adequate rate of return in the Regal General Freight business and the Transaction will also release working capital of approximately $7 million.
“Under the Transaction, Regal will transfer to Centurion its rights and entitlements under customer contracts and Centurion will make offers of employment to the majority of the employees of KSF working in the Regal General Freight business.”
Look back at K&S’ 2010 acquisition of Regal, here
K&S says it has agreed to:
- a nominal purchase price for the assets of the Regal General Freight business (largely customer contracts and intangible assets) to be acquired under the agreement;
- provide access to Centurion, at commercial rates, to a number of its fleet to support the customer contracts for a transitional period.
The parties are targeting August 30 for finalise the transaction.
K&S says its FY2019 financial statements, yet to be publicly released, are expected to include an after-tax charge of $5.1 million in relation to accounting adjustments, including impairment charges, as a result of the transaction.