Shares in Automotive Holdings Group have jumped seven per cent after the company announced the sale of its refrigerated logistics business to China's HNA Group in a $400 million deal.
The car and truck dealership owner said HNA subsidiary CC Logistics will pay $280 million in cash and assume $120 million of finance lease liabilities for the Rand, Harris, Scott's and JAT businesses.
AHG shares gained 24 cents, or 6.9 per cent, to $3.70.
The company also said it experienced a 3.1 per cent drop in net profit in the three months to October, but that had not initiated the sale.
Chairman David Griffiths said the sale was an opportunity to realise shareholder value that reflected the unit's improved financial performance after a restructure.
"The sale also provides AHG with both the resources for further growth in our automotive operations and scope for capital management," Mr Griffiths said.
The deal is subject to Foreign Investment Review Board approval.
AHG Logistics chief executive Stephen Cleary will lead the business when it passes to HNA, which also owns nearly 20 per cent of Virgin Australia.
AHG will provide a range of transitional services including IT to Refrigerated Logistics for up to 12 months after the sale, and has agreed not to operate a rival business for five years after the deal's completion.
