File picture AECI plans to sell its its public water business to a black-owned consortium Nsukutech, as the controlling shareholder, and Junaco as minority shareholder, as part of a wider restructuring of AECI's businesses.
Image: AI lab
AECI has moved further with the restructuring of its businesses after announcing plans on Monday to sell its Improchem Public Waste Water businesses to a South African majority black-owned special purpose vehicle, with Nsukutech as the controlling shareholder and Junaco as the minority shareholder.
The Public Water Business is a separate division of Improchem's water business and includes the manufacturing and supplying of water treatment chemicals, providing engineered water treatment solutions, and supplying other complementary products to the public water sector. An AECI spokesperson said the value of the deal would be disclosed once all the agreements were finalised.
"Divesting our Public Water Division delivers on our strategy to dispose of non-core assets, streamline operations, and optimise our portfolio. It will support our capital allocation strategy and position AECI for sustainable growth and to focus on improving the performance of our core business," AECI Group CEO, Holger Riemensperger, said in a statement.
In late 2023, AECI management announced plans to restructure its portfolio, and six businesses were identified for disposal. In the year to December 31, 2024, the group reported a 37% decline in headline earnings per share to R7.16, while a basic loss per share of R2.62 arose also because of R860 million of one-off costs from the disposals of AECI’s Much Asphalt and Animal Health businesses.
The six businesses were Schirm in Germany, Much Asphalt, Animal Health, Sans Fibers, the Food and Beverage business, and the Public Water Division. AECI Mining and AECI Chemicals remain the two core business segments.
Nsukutech manufactures specialty chemicals for water treatment, mineral processing, and other applications. Junaco is a Tanzanian-based company and a supplier of water treatment chemicals and equipment across Eastern and Southern Africa.
Junaco has played a key role in the export of AECI's water treatment chemicals across Africa, with a partnership that has spanned over 15 years.
AECI said on Monday that the Public Water Business will continue supplying its direct clients and distributor network in anticipation of a smooth transition of assets, capacity, and contractual opportunities to the purchaser, and it would ensure continuity of service and supply into the public water market.
The group also announced Monday that all suspensive conditions for the disposal of Much Asphalt had been met and the transaction closed in line with the guided purchase consideration of R1.1 billion. The funds would be used in line with AECI's capital allocation framework, a statement said.
AECI's share price traded 0.25% lower at R98.17 on the JSE on Monday afternoon, a price only slightly higher than the R93.60 it traded at a year ago.
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