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Vossloh signs contract on the divestiture of its Locomotives business
Strategically important step towards focusing Vossloh on its core business rail infrastructure.Strategic and strong partner was gained with CRRC Zhuzhou Locomotive.Closing of the transaction expected in the coming months
Today, Vossloh AG signed a contract for the sale of its Locomotives business unit, currently reported as discontinued operations, to CRRC Zhuzhou Locomotive Co., Ltd., Zhuzhou, China (CRRC ZELC), a subsidiary of the China Railway Rolling Stock Corporation Ltd. (CRRC). CRRC is the largest rolling stock manufacturer in the world. The agreed purchase price is still subject to adjustment at the closing date, depending on the development of various balance sheet positions, and is projected to amount to a low single-digit million figure. Vossloh is under this agreement due to receive proceeds from the future sale of certain assets, resulting in expected cash inflows of approx. €10 million in the next few years. On this basis, Vossloh expects an additional negative impact on the result from discontinued operations in the amount of approx. €30 to 35 million. CRRC ZELC has also contractually agreed to take over all guarantees and sureties that Vossloh AG had taken on for the Locomotives business unit. The economic transfer to the buyer will take place once the transaction is completed. The Supervisory Board of Vossloh AG has already approved the divestiture. Until the transaction is completed, various conditions must still be fulfilled. The transaction is still subject to authorization by the respective authorities in Europe and China, specifically merger control and foreign trade law clearances as well as standard approvals required from the Chinese authorities. Completion is expected in the next few months.
The Locomotives business unit is the last one remaining from the original three business units of the Transportation division that Vossloh has been selling off since the decision was made to strategically focus on rail infrastructure. The former business units Rail Vehicles and Electrical Systems were sold in 2015 and 2017 respectively. With the completion of the current transaction, the related restructuring of the Group will have been successfully concluded.
Andreas Busemann, CEO of Vossloh AG: “We are excited to announce the sale of the business unit after a long and challenging sales process. We have found the optimal strategic partner for Vossloh Locomotives in CRRC ZELC, which has the necessary resources to successfully further develop the Locomotives business in the long term.”
The Locomotives business unit, headquartered in Kiel, develops and produces state-of-the-art locomotives and offers all the maintenance and repair services that they require. CRRC ZELC was founded in 1936 and is a subsidiary of the largest manufacturer of rolling stock in the world, CRRC.