Transnet has sold its housing loan book to the FirstRand group for R1,4-billion, its chief executive, Maria Ramos, announced in Johannesburg on Tuesday.
Ramos said the sale of the non-core asset — which had been in process since October 2006 — was part of the company’s turnaround strategy that focused on freight transport.
”We believe we have a great deal with a great partner,” she said.
First National Bank (FNB) was selected from eight other bidders because it had met all the disposable criteria set by Transnet. These included price, profile and background and black economic empowerment.
Both Transnet and FNB declined to name the other bidders, The transaction included a service-level agreement that would ensure preferential rates for employees and about 220 Transnet staff — located at the Carlton Centre head office and at 13 Transnet Housing Division loan centres — would be transferred to FNB.
FNB would retain all employees for a 12-month period.
The staff transfer would not include employees from Transnet’s housing property portfolio, which was responsible for administering lodges and other properties.
Ramos said the book had been sold because Transnet was not a financial-services provider, nor did it aspire to be one.
”We are involved in building a world-class freight transport and logistics business. And this disposal takes us closer to that goal.”
She said the proceeds of the sale would go to financing the company.
FNB chief executive Michael Jordaan said negotiations with Ramos had been ”tough but fair”.
He said the bank had a pedigree for the successful acquisition of loan books through its housing, finance and home-loan divisions.
”This has allowed FNB to make inroads into the lower-income housing market,” he said.
Jordaan said FNB had entered into the retail market in 2005 and new housing projects in 2006. Under the financial sector charter, he said the company was committed to reaching a target for housing of R8,4-billion from 2004 to 2008.
Currently, FNB has a total of 26% in direct and indirect black shareholding in South African operations.
Other discontinued non-core asset businesses, for which Transnet was still in the process of negotiating sales, included SA Express, Viamax, Freightdynamics, Autopax, Shosholoza Meyl, arivia.com and the Blue Train.
”[We are] hoping that this is the last financial year in which we have this handful [of businesses for sale] that have not been completed,” she said.
Ramos declined to comment on the value of the outstanding businesses as it would jeopardise Transnet’s negotiating power with potential buyers.
”We want to get the best value we can. We want to be able to negotiate,” she said.
The deal, which became effective on March 26 2007, has yet to be approved by the Competition Commission and the Competition Tribunal. — Sapa