TRANSPACIFIC Industries Group Ltd (ASX:TPI) shares today rose slightly at news of the sale of its Commercial Vehicles Group.
The sale valued $219 million to Penske Automotive Group Inc should be completed by September 30 this year.
A net profit of about $85 million will result from the sale and be recognised as a significant 2014 financial year event for TPI.
The company said debt would be paid down annually via proceeds from the sale, which should create net savings on interest of about $12 million.
TPI CEO Kevin Campbell (pictured) says the sale of the "non-core" asset is a positive part of changes to the company and would strengthen its balance sheet.
"Combined with the sale of other non-core assets over the past twelve months, the company will have realised total proceeds of approximately $250 million," says Campbell.
"Which have been used to reduce debt and increase financial flexibility."
Penske Automotive is a leading US-based automotive retailer operating more than 330 retail franchises representing 39 different brands internationally.
Deutsche Bank acted as financial advisor and Ashurst acted as legal advisor on the sale.
TPI's shares rose about five per cent to a high of 92 cents per unit after the announcement and finished up at 87 cents, a 6.7 per cent increase on the previous day's close.
*Please note: Transpacific Industries Group (ASX:TPI) completed a changed of name to Cleanaway Waste Management (ASX:CWY) on July 1, 2016
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