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KAP Ltd., a South African industrial company based in Stellenbosch near Cape Town, is considering a sale of the logistics operations of its Unitrans unit in an effort to reduce its debt, according to sources familiar with the matter. The company is aiming to raise as much as 6 billion rand ($317 million) from the sale, although the preferred structure of the deal has yet to be agreed upon and a buyer has not yet been identified.
Although KAP has declined to comment due to being in a closed period ahead of its financial results release on Feb. 28, it has previously stated in its financial statements that it is reviewing its portfolio and plans to exit low return or strategically misaligned businesses.
The transport and logistics sector in South Africa faces significant challenges due to deteriorating infrastructure and persistent power cuts. However, if there are any signs of improvement in the performance of state-owned firms such as Transnet SOC Ltd. and Eskom Holdings SOC Ltd., potential buyers of Unitrans may be more optimistic about the outlook.
Unitrans is one of the largest transport and logistics businesses in Africa, operating not only in South Africa but also in other countries including Madagascar, Tanzania, and Zambia.