The transaction, the process of which Transnet began in October 2006, formed part of the company’s restructuring programme, involving the disposal of noncore assets to focus on its core freight and logistics functions, CE Maria Ramos told journalists in Johannesburg.

The transaction had the support of all relevent stakeholders, but was subject to regulatory approval by the Competition Commission and the Competition Tribunal.

"It's a good deal, we're delighted," Ramos stated.

FNB CEO Michael Jordaan said that the asset would be incorporated under the financial services provider's Housing Finance unit, which had committed to provide R8,4-billion worth of housing loans between 2004 and 2008.

It had reached the halfway mark of this target, he noted.

The portfolio comprises three main parts – residential mortgage loans, education and home-improvement loans, and miscellaneous loans.

There are currently 20 000 residential loans, worth, on average, R130 000, and with an average nine-year life.

The residential mortgage component of the portfolio has a fair value of R1,3-billion.

There are 16 000 education and home-improvement loans, amounting to a fair value of R120-million.

The miscellaneous loans are primarily for the 220 staff employed at Transnet’s Carlton Centre headquarters, in downtown Johannesburg.

Ramos noted that all current loans would be maintained, while future loans would offer competitive rates.

There were initially ten bidders, which were reduced to a short list of three

The South African government is repositioning Transnet as a focused freight and logistics group. Several assets have already been sold to private investors, or moved under the control of other government departments.

PROGRESS ON PROPERTIES SALE

Ramos went on to say that the disposal of the other main portfolio withing Transnet Housing, its properties portfolio, was progressing.

"We have applied to sell a lot of our noncore properties," she said, adding that Transnet had received some approvals for this.

The Department of Housing had expressed interest in some of these assets, and Transnet was working with the department, stated Ramos.

The properties portfolio includes lodges, hostels, houses and residential land.

The State-owned firm had also received government approval for the disposal of some of its commercial properties, and it would be going to the market with these, she said.

Its noncore commercial properties included the 50-storey Carlton Centre, in Johannesburg, which is the tallest building in Southern Africa.

She said that Transnet would approach the sale of this "premium property" in a similar manner to the way it sold its V&A Waterfront.

Last year, Transnet and its pension funds sold the prime Cape Town property for $1-billion, or R7-billion, to a UK- and Dubai-owned consortium.

"We have got permission to sell the Carlton Centre, and we will be looking at it in the near future," Ramos stated.

"We think of it in the same way as the V&A Waterfront and we will take the same kind of approach."