The proposed acquisition by Bidvest of enX's interest in fleet management and logistics business Eqstra Fleet Management and Logistics has been terminated.

enX shareholders had approved the divestment on November 29, 2019, but subsequently the final outstanding condition precedent in relation to the transaction, being the approval by the prudential authority, has not been fulfilled by the long stop date of May 4.

To date, enX has not been able to reach agreement with Bidvest to extend the long stop date to allow sufficient time for the prudential authority to complete its process, which was well advanced.

Meanwhile, in terms of the impact on enX’s business during the Covid-19 lockdowns in South Africa and the UK, the company reports that the majority of its businesses have been able to trade, albeit at lower capacity and revenue levels.

The company says it has implemented stringent hygiene controls and protocols for those employees working away from home in full compliance with government directives, and that, to date, no employees have tested positive for Covid-19.

enX is confident that the gradual easing of lockdown restrictions in South Africa, initially from Stage 5 to Stage 4, effective May 1, will begin to boost company activity levels and result in improved revenue streams.

It also expects new and used equipment sales to remain under pressure as a result of the weakening of the Rand and slowdown in the economy.

enX’s diversified customer base, annuity revenues and its in-use fleets, which are large, held at attractive values and funded, will be supportive of the business going forward, the company reports.

In terms of the UK business, enX expects business there to improve in revenue from mid-May as the UK eases its lockdown regulations.

In terms of funding and liquidity, enX report that as a result of the termination of the transaction between it and Bidvest Bank, it is enX’s intention to engage with its lenders regarding the refinance of the South African leasing businesses bank term facilities and continue with its debt capital market programme.

As at April 21, enX’s R225-million ENX04 note was extended by two years and on May 4 a R160-million 13-month reinvestment arising from the company’s maturing ENX05 notes took place.

The South African trading businesses and UK leasing business will continue to maintain their own dedicated credit facilities and attend to maturities in the normal course of business.

enX also report their cash resources arising from a drawdown of liquidity lines remain healthy. In addition, debtors collections have thus far been steady. The group has taken many steps to reduce cash outflows which include reductions in overhead, supplier orders and capital expenditure, with these measures continuing as needed based on evolving trading conditions.