Sime Darby Motors sells distribution businesses in Australia, New Zealand

PETALING JAYA: Sime Darby Bhd’s (Sime Darby) automotive arm Sime Darby Motors is disposing of its automotive distribution businesses in Australia and New Zealand, which are involved in the import and distribution of the Peugeot, Citroen and DS brands in the two markets. The disposal sum was not disclosed.
The group told Bursa Malaysia that its indirect wholly owned subsidiaries had entered into asset sale agreements with Inchcape Australia and Rick Armstrong Motor Group for the disposal. It is expected that, effective June 1 2017, these companies will take over the Australasian distribution for the brands of French carmaker Groupe PSA.
“After careful consideration, a decision was reached to divest the Australasian distribution businesses. This is in line with Sime Darby Motors’ strategy to focus on the expansion of its retail car and commercial truck footprints on both sides of the Tasman. Once the decision was made, KPMG was engaged to conduct a full tender process for the sales on our behalf,” said Sime Darby Motors managing director for Australia and New Zealand, Patrick McKenna.
On a separate note, Sime Darby said it has received bondholders’ approval to restructure its US$800 million (RM3.46 billion) sukuk, a major milestone in the group’s proposed debt reorganisation, which forms part of its plan to create three independent listed companies.
Holders of the sukuk, of which US$400 million matures in 2018 and an equal amount in 2023, approved the company’s plan to buy back the papers or change the obligor or borrower to Sime Darby Plantation from Sime Darby currently.
“This is an important step for the group in our proposed reorganisation exercise to unlock value for shareholders. We must ensure that each listed company has the optimal capital structure which will allow it to pursue growth with focus and agility,” said Sime Darby president and CEO Tan Sri Mohd Bakke Salleh.
In January, Sime Darby announced the spin-off of its plantation and property businesses. The trading and logistics segments, however, will remain under Sime Darby, whose listing status will be retained.
On April 18, 2017, Sime Darby launched a debt restructuring exercise for its US dollar-denominated sukuk. Under the exercise, sukuk holders can cash in on their investment in the sukuk or agree to change certain terms and conditions and replace Sime Darby with Sime Darby Plantation as the new borrower or obligor.
Sime Darby achieved a final tender and consent participation of 91% across both series of sukuk. Investors holding almost a quarter of the 2023 sukuk chose to remain invested in Sime Darby Plantation. HSBC acted as the sole structuring and dealer manager for the exercise.