"The tourism division had become sub-scale in the context of Imperial Holdings‚ and consequently the group has agreed to dispose of its travel‚ tourism and coach charter businesses to Cullinan‚ subject to approval by the Competition Commission‚" Imperial said in a statement.
Mohammed Akoojee‚ executive head for investor relations at Imperial Holdings‚ said even though tourism was a small section of the Imperial group's revenue‚ it wanted to keep a holding in tourism.
"We want to keep our options open. That is why we are buying a 10% stake. Tourism is worth between R400m to R500m a year to Imperial in revenue terms, which in terms of total group revenue for of R90bn is very small. However, while tourism is not part of our main focus it is worth being in the sector‚" Akoojee said.
The tourism business units being sold comprise Springbok Atlas Tours and Safaris‚ Springbok Atlas Charter‚ Grosvenor Tours‚ Eastgate Safaris and 74.9% of Silverton Travel.
Springbok Atlas Tours is an inbound tour operator based in SA‚ which focuses on consolidating and selling packaged tours to a wide range of international customers. Grosvenor Tours‚ is also inbound tour operator that focuses on luxury travel to Africa and includes group incentives‚ events and conference services.
Eastgate Safaris offers safaris‚ transfers and excursions in the northern Kruger National Park and surrounding areas while Silverton Travel‚ which trades as Edusport‚ is a sports and events tour operator.
Springbok Atlas Charter operates a coach transportation business across SA and Namibia.
Cullinan will pay for the purchase of Imperial's tourism businesses through the issue of 81‚818‚181 shares. The 60-day volume weighted average price for Cullinan is R1.26 per share.
Cullinan's Michael Tollman said the transaction had various key benefits for Cullinan. "These travel businesses are an excellent fit for travel specialist Cullinan Holdings and we believe that these brands will benefit from being part of the travel focused Cullinan Group.
"Assuming current market conditions remain‚ these businesses will contribute to profitability of Cullinan in the future‚ and will allow for the expansion of our African footprint‚" he said.
Source: Business Day via I-Net Bridge
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