K&S sells WA-based freight business to Centurion

K&S Corporation Limited has announced that it has reached an agreement with Centurion for the sale of the business and certain assets of its Western Australia-based Regal General Freight business.
An unconditional agreement has been executed by Centurion and K&S Corporation subsidiaries Regal Transport Group Pty Ltd (Regal) and K&S Freighters Pty Ltd (KSF) to give effect to the Transaction.
After considering various options in relation to Regal General Freight, the Board of K&S Corporation elected to undertake this transaction to realise improved shareholder returns and provide ongoing certainty to the Regal General Freight employees and customers.
The, according to K&S, will allow the business to focus on its core competencies, including its Regal Heavy Haulage business which will continue to be operated and invested in by K&S Corporation.
K&S Corporation will redeploy (or sell) assets that are not currently generating an adequate rate of return in the Regal General Freight business and the Transaction will also release working capital of approximately $7 million.
Description of Transaction Under the Transaction, Regal will transfer to Centurion its rights and entitlements under customer contracts and Centurion will make offers of employment to the majority of the employees of KSF working in the Regal General Freight business.
The parties are targeting 30 August 2019 for completion of the Transaction. The agreement is not subject to any conditions. K&S Corporation’s 30 June 2019 financial statements are expected to include an after-tax charge of $5.1 million in relation to accounting adjustments, including impairment charges, as a result of the transaction.