AHG logistics sale falls through

Automotive Holdings Group has confirmed the proposed $400 million sale of its refrigerated logistics business has fallen through after Chinese conglomerate HNA Group called off the deal due to liquidity issues and approval delays.

HNA proposed the offer in November last year, but had failed to receive approval from the Foreign Investment Review Board.

AHG managing director John McConnell said it was a disappointing outcome.

“HNA made an unsolicited offer for the refrigerated logistics division last year and we engaged with HNA,” he said.

“Unfortunately, since that approach HNA has run into liquidity problems, which combined with the delayed FIRB process left the conditions precedent unable to be satisfied within an agreed timeframe.”

AHG warned on Thursday last week that the sale would not be completed by the specified June 30 deadline due to delays in the approval process.

Concerns around the deal had centred on HNA’s financial struggles, with reports that the group is carrying about $US90 billion in debt.

Under the proposal, AHG was set to receive $280 million in cash while HNA would assume $120 million of debt associated with the logistics business, which includes the operations of Rand, Harris, Scott’s and JAT.

The refrigerated logistics business recorded earnings before interest, tax, depreciation and amortisation of $35 million last financial year.

Shares in AHG were off 10 per cent at $2.56 each at 12pm AEDT, having fallen from a high of $3.80 back in March.