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South Africa: Modest Debut for Imperial Spinoff Eqstra
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Business Day (Johannesburg)
13 May 2008
Posted to the web 13 May 2008
Thabang Mokopanele
Johannesburg
CAPITAL equipment rental and leasing group Eqstra, which made a modest debut on the JSE yesterday, plans to diversify into agriculture, power generation and railing stock.
CEO Walter Hill said yesterday that although there were no specific plans yet, the aim was to look at assets that suit the group's model.
Spun off from Imperial Holdings, Eqstra's (EQS) stock shares opened at R17,99, valuing the company at R5,2bn with more than 290-million shares changing hands. The share closed at R18.
The group leases and sells heavy capital equipment and, according to Hill, is positioned to take advantage of the boom in mining and construction driven by high commodity prices and public sector infrastructure development. "The logic of listing stems from us wanting to have higher gearing and debt liquidity. The commodity market is in a super cycle and we think it is an opportune time for us to exploit it ," he said.
The group has a forward book of R14bn of committed orders and several continuing projects for this year. "The challenge is to ensure the business has enough gearing and debt liquidity to grow and develop skills to sustain growth.
"A lot of our efforts and investment is going to be in construction and the mining sector, because we believe that is a specific growth area. That attracts more favourable margins at this stage." Hill said.
Eqstra has operations in the UK and sub-Saharan Africa. Its customers include AngloGold Ashanti and MTN Group .
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The group reported revenue of R5,2bn last year, while profit came in at R565m.
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