Barloworld Ltd has sold a 25 per cent stake in its South African and African logistics business to a consortium led by industry veteran Issac Shongwe and his company Letsema Holdings, for around R118 million (USD17.6 million).

The transaction will lead to the formation of a new company, Barloworld Logistics Africa (Pty) Ltd, which will house all of the South African and African business activities of Barloworld Logistics Pty Ltd.

Barloworld Logistics Africa will have net assets of R472 million (USD70.5 million) with annual revenues exceeding R600 million (USD89.7 million).

The Shongwe-led consortium will play an active role in business development and the transformation of Barloworld Logistics Africa with Shongwe joining the board as an executive director, a company statement said.

The consortium consists of Letsema Holdings (60 per cent), CEPWAWU Investments, a trade union investment company (20 per cent), while the remaining 20 per cent has been placed in a trust to attract other black entrepreneurs who will be committed to joining and developing the business.

Shongwe founded Letsema Consulting, a strategic management consulting firm in 1995. He is founder and chairman of Letsema Investments, a black empowerment investment holding company, and has served as an executive with logistics and supply chain companies.

"We are pleased that their BEE (black economic empowerment) strategy requires real black participation at all levels of the organisation. We look forward to our partnership, to growing our business together, and contributing to the continued transformation of the industry," Shongwe said.

Barloworld Logistics' business in the UK, Europe, the US and the Middle East will remain directly owned by Barloworld Logistics Pty Ltd.