KAP Ltd. is reportedly considering selling the logistics division of its Unitrans business, as part of its plans to lower the South African industrial company's debt, according to Bloomberg citing people familiar with the subject. The unnamed source stated that the group, which is based in Stellenbosch, close to Cape Town, is requesting up to $6 billion ($317 million) for the company. According to them, KAP has held discussions with private equity firms, but neither the buyer nor the ideal deal structure has been decided upon. KAP declined to comment during before the financial results that are scheduled to be released on February 28. In its most recent financial statements, KAP, which was formerly a division of Steinhoff International Holdings NV before it was crippled by an accounting scandal slightly over six years ago, stated that a review of its portfolio is currently taking place. According to the holding company, the strategy is to get out of low-return or strategically misaligned businesses. Deteriorating infrastructure and frequent power outages pose serious operational challenges for South African transport and logistics companies. Prospective buyers of Unitrans may see an improvement in the situation if state-owned companies like power utility Eskom Holdings SOC Ltd and rail and ports company Transnet SOC Ltd show signs of improving. According to the people, Unitrans, one of the biggest logistics and transport companies in the continent, is streamlining expenses by merging its passenger, rest of Africa, and South Africa divisions into a single company. According to them, a deal might entail selling all of these units or a stake. According to its website, Unitrans is active outside of South Africa in nations like Madagascar, Tanzania, and Zambia. KAP decreased by 14 per cent this year as of 9:06 a.m. in Johannesburg, rising 4.2 per cent to 2.25 rand.
