An 18 May 2017 press release from Isuzu Motors Limited announced the sale of GMSA‘s pickup truck business to an entity tentatively named Isuzu Truck South Africa (Pty) Limited (ITSA).
Before the business transfer, Isuzu will purchase from GMSA a 30% equity stake in ITSA, which assembles and distributes Isuzu commercial vehicles, whereby Isuzu will transform the company into its wholly-owned subsidiary with a new company name of “ISUZU MOTORS SOUTH AFRICA (Tentative)”.
Isuzu will further reinforce sales, marketing and after-sales activities for commercial vehicles and pickup trucks to establish a foundation for sustainable, long-term business growth in the South African market.
According to the release Isuzu has budgeted/put aside/estimated an amount of capital for this transaction in the amount R80 Million (about 650 million Yan).
From the release it is not clear if that amount is only to buy General Motors 30% or if it is the total amount to be invested in the plant and transfer plus the sale of 30%. So, the amount could be less… or more.
If the R80 Million is just for the 30% stake that would value Isuzu’s business at R266.66 Million which does seem to be a bit of a bargain price.
To put that estimate in perspective: In July 2009 the 5th Generation Isuzu KB marked the biggest, single, product line investment in the history of the company. Capital expenditure in excess of R500 million was undertaken, with the lion’s share going towards tooling and facilities development at the company’s Kempston Road plant in Port Elizabeth.
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