BUILDING: Columbia DBL Sold For R1
Recent Western Cape Business News
JSE-listed infrastructure conglomerate Buildmax has practically given away Columbia DBL, the largest masonry product manufacturer in the Western Cape.
Blackheath-based Columbia DBL was established in the seventies, and offers turnkey solutions for concrete masonry requirements (paving, retaining wall blocks, standard masonry blocks and bricks).
The move by Buildmax is perhaps understandable since the company has of late begun to focus more intensely on its mining services operations up country. Buildmax is also trying to bolster its financial position, and proceeds from the Columbia DBL sale will be used to cull debt.
But the harsher truth is Buildmax’s admission that Columbia DBL was sold off because the business “has been unable to deliver sustainable positive returns”. It would seem Columbia DBL has been operating at a loss – which probably explains why the business was sold for a nominal R1 (yes, one rand!) to purchaser JP Otto and LJ Wightman.
The financial effects of the transaction show Buildmax will lose some R13.2 million on the sale of Columbia.
With a R1 purchase price readers may have a question or two around what ‘proceeds’ Buildmax might be referring to when talking of reducing debt.
Although Messrs Otto and Wightman will only ‘technically’ be handing over a cheque for R1, the duo will also have to settle a loan account of some R22 million with Buildmax. Fortunately, the loan account was purchased for just R5.5 million – a term of the deal that probably underlines just how much Columbia DBL might be struggling in current trading conditions.
Best of luck Otto and Wightman!
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