South Africa's Barloworld Ltd has sold its US materials handling equipment lease and loan portfolio to Hyster Capital for ZAR564 million (USD77.3 million).

Barloworld Ltd's US industrial distribution division, Barloworld Handling, started distributing Hyster forklifts in 2001. Barloworld Handling, based in Charlotte, North Carolina, is the Hyster dealer for southeastern USA, with more than 30 locations in eight states. Hyster Capital is a joint venture between General Electric Corp and Nacco Materials Handing Group Inc.

Barloworld CEO Tony Phillips said the move was part of the company's aim to "unlock value where capital was tied up in unproductive assets".

"There are [several] other projects currently under way ... including disposal of our steel tube division and other disposals we will announce in due course," he said.

Phillips said Barloworld was negotiating with a "partner in the UK" to dispose of the UK leasing book. The deal was expected to be finalised by the end of 2006.

Leasing assets related to the company's long-term contracts with the UK's Ministry of Defence (MOD) will be retained, a Barloworld statement said. Barloworld manages more than 6,000 materials handling equipment units on long-term contracts for MOD's defence logistics organisation. The equipment includes forklifts, tractors, trailers and cranes at more than 600 global establishments (Forkliftaction.com News #62).

Phillips said the leasing books did not generate sufficient returns.
"There are other people who are much better at running leasing books than we are and our approach for some time has been to partner with them, rather than use our own balance sheet in this arena."