(Alliance News) - Inchcape PLC on Wednesday said it has agreed to sell its three retail sites in mainland China for GBP54 million in cash.
China has been Inchcape's only exposure to retail operations in Asia. The sites comprise Lexus in Shaoxing, Porsche in Nanchang and Mercedes-Benz in Jiujiang.
The automotive distributor said these sites will be disposed to China Yongda Automobiles Services Holdings Ltd. The sale follows recent rationalisation in Australia and the UK to optimise Inchcape's retail-only portfolios.
Together with the UK and Australia disposals - of the combined 16 sites -earlier this year, Inchcape said it will receive a cash inflow of GBP150 million.
The transaction is expected to complete by the first quarter of 2020 and is conditional upon regulatory approvals. Given the timing of completion, Inchcape said it expects minimal impact to its 2019's trading profit.
"The disposal of our three remaining sites in mainland China marks a further shift towards focusing on our core distribution business model, thereby allocating our resources towards more attractive profit pools in the Asia region," explained Chief Executive Stefan Bomhard.
"We remain focused on ensuring we are driving value for shareholders today and for the future," added Bomhard.
Inchcape shares were trading 0.6% lower on Wednesday in London at 626.00 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Inchcape (INCH)