Potential buyers line up as Transnet sell-off begins

Bidding for Freightdynamics gets moving
ALAN PEAT
IN ITS first major move to dispose of non-core assets, Transnet has put its freight transport business, Freightdynamics, up for grabs for an unnamed price, and on a competitive bidding process. But its main labour union, the SA Transport and Allied Workers’ Union (Satawu), has already thrown a spanner in the works - immediately demanding that the parastatal remove its advertising of the sale. This surprise union move comes only six weeks after a series of high-level Transnet/union meetings at the end of which the parties announced that all were agreed that Transnet could sell all its non-core businesses before year-end – provided it consulted over each decision with the relevant unions. Now, however, Randall Howard, general-secretary of Satawu, insists that Transnet has not finalised the consultation with his union and the company needs to suspend the sale of Freightdynamics. While not being opposed to the sale, Howard added that Satawu had not yet finalised consultations with its members on job security and employee benefits under the new ownership. But, despite this objection, the sale of the freight operation – with four business units; a national fleet of 714 commercial freight vehicles involved in short-haul, long-distance and overborder road transport; a well-established infrastructure; a national network of depots and other capital equipment assets; and an extensive staff complement – has raised a lot of initial excitement in the private sector. There’s going to be a long list of interested parties, according to Anthony Dawe, CEO of the Bidvest Group’s freight operation, Bidfreight – which itself is “having a look”. “There are big corporations in SA that have cash to invest,” he told FTW, “and this type of potential investment is bound to stir interest.” But he, like a lot of the others FTW contacted, suggested that it was early times, and that possible buyers would have to do a lot of homework on the structure of Freightdynamics before anybody is likely to put up a bid. A similar sentiment was expressed to FTW by Ivan Clark, CEO of the Grindrod Group. “As yet we don’t know very much about Freightdynamics,” he said. “But, at the end of the day, our business is logistics, and we’ll certainly be looking at it.” FTW also spoke to the Imperial Group, Super Group and Unitrans Freight as just three of the other potential buyers. But, for varied reasons, no public comment was available from them. Easier to say who won’t be buying. Bloemfontein-based freight operators, the Sure Group, are certainly not buying, according to MD Jan van der Westhuizen. Nor is fellow Free State trucking entrepreneur, Jan Venter. Even more brief was Jan Nair, MD of Cross Country Containers. “We’re not in the least interested,” he told FTW. But, in conversation with a lot of these executives one point became clear – the labour element is going to be a major part of the price of the business. For that reason, any purchase is unlikely to be on a regional basis as one trucker suggested – telling FTW that breaking it down into regional units might be the way to get the best price for the business overall. Nor is it likely to be on an asset-stripping basis, according to Dawe. “Because of this labour problem,” he said, “I think Transnet is going to sell it as a whole.” Bidders have until July 12 to express their interest.