Vossloh signs contract on divestiture of locomotives business
Vossloh is set to complete its group restructuring with the sale of this third business unit, since it made the decision to strategically focus on rail infrastructure.
Vossloh AG has signed a contract for the sale of its locomotives business unit, currently reported as discontinued operations, to CRRC Zhuzhou Locomotive Co, Ltd, Zhuzhou, China (CRRC ZELC), a subsidiary of the China Railway Rolling Stock Corporation Ltd (CRRC).
The agreed purchase price is still subject to adjustment and is projected to amount to a low single-digit million figure. Under this agreement, Vossloh is due to receive proceeds from the future sale of certain assets, resulting in expected cash inflows of approximately €10 million in the next few years.
On this basis, Vossloh expects an additional negative impact on the result from discontinued operations in the amount of approximately €30 to 35 million. CRRC ZELC has also contractually agreed to take over all guarantees and sureties that Vossloh AG had taken on for the locomotives business unit. The economic transfer to the buyer will take place once the transaction is completed. The Supervisory Board of Vossloh AG has already approved the divestiture. Until the transaction is completed, various conditions must still be fulfilled.
The transaction is still subject to authorisation by the respective authorities in Europe and China, specifically merger control and foreign trade law clearances as well as standard approvals required from the Chinese authorities. Completion is expected in the next few months.
The locomotives business unit, headquartered in Kiel, is the last one remaining from the original three business units of the Transportation division that Vossloh has been selling off since the decision was made to strategically focus on rail infrastructure. The former business units Rail Vehicles and Electrical Systems were sold in 2015 and 2017 respectively. The completion of the current transaction will conclude Vossloh’s restructuring.
Andreas Busemann, CEO of Vossloh AG: “We are excited to announce the sale of the business unit after a long and challenging sales process. We have found the optimal strategic partner for Vossloh locomotives in CRRC ZELC, which has the necessary resources to successfully further develop the locomotives business in the long term.”