30/10/2006 - 14:12

Ford dealership sales let AHG takeover Perth Auto Alliance

30/10/2006 - 14:12

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West Perth-based car dealers Automotive Holdings Group Ltd will buy out the minority stakeholders of its Perth Ford Alliance under a deal which required the consortium to sell three metropolitan dealerships.

Ford dealership sales let AHG takeover Perth Auto Alliance

West Perth-based car dealers Automotive Holdings Group Ltd will buy out the minority stakeholders of its Perth Ford Alliance under a deal which required the consortium to sell three metropolitan dealerships.

AHG acquired a 60.3 per cent stake in the PAA in June 2005 with an option to acquire the remaining 39.7 per cent, as long as AHG's combined Ford market share in Perth did not exceed 50 per cent, based on Ford's market statistics for 2004.

The deal will see AHG fully acquire Challenger Ford, Titan Ford and Lynford Ford, going with the existing two dealerships, NuFord and Seaview Ford, which it currently owns.

The remaining shareholding was owned by the Ford International Capital Corporation.

The three other PAA dealerships Midway Ford, Centre Ford and Range Ford & Park Ford, have been sold to other parties.

AHG chief executive officer Bronte Howson said there would be minimal financial impact on the company's ongoing result after it divests the dealerships and takes control of the PAA.

"We expect the results from full ownership of the three retained dealerships in 2006-2007 to be similar to our 60.3 per cent share of the earnings of the PAA in 2005-2006," Mr Howson said.

AHG operates 23 dealerships in WA and recently moved into the Victorian market through the opening of a Hino truck dealership.

AHG also operates logistics businesses throughout Australia through subsidiaries Rand Transport, KTM Sportmotorcylces and AMCAP.

Shares in AHG finished the day five cents stronger at $2.30.

 

The full text of a company announcement is pasted below

AHG SETTLES PLANNED SALE OF PAA FORD DEALERSHIPS

Automotive Holdings Group Ltd today announced the settlement of the planned divestment of 3 dealerships in the Perth Auto Alliance.AHG has also announced it will exercise its option to acquire 100 per cent of the PAA through the purchase of the remaining 39.7 per cent held by Ford International Capital Corporation.

In June 2005, AHG acquired a 60.3 per cent stake in the PAA, then comprising 6 Perth metropolitan Ford dealerships, with an option to acquire the remaining 39.7 per cent.

As detailed in last year's prospectus the acquisition was conditional upon the PAA divesting certain dealerships such that AHG's combined Ford market share in the Perth metropolitan market did not exceed 50 per cent based on Ford's market statistics for 2004.

In exercising its option, AHG will acquire FICC's 39.7 per cent stake in the PAA. The remaining dealerships in the PAA- Challenger Ford, Titan Ford and Lynford Ford - will become wholly owned by AHG, which currently also owns the NuFord and Seaview Ford dealerships.

The PAA divested 3 dealerships as follows:

- Midway Ford, purchased by Midway Nominees Pty Ltd;
- Centre Ford, purchased by Lefkapha Pty Ltd ; and
- Range Ford & Park Ford, purchased by Hunter Automotive Group Pty Ltd.

AHG Chief Executive Officer Bronte Howson said there would be minimal financial impact on the Group's ongoingresults subsequent to the sale of these dealerships and the acquisition of 100 per cent of the PAA.

'We expect the results from full ownership of the 3 retained dealerships in 2006-07 to be similar to our 60.3 per cent share of the earnings of the PAA in 2005-06," said Mr Howson.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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