Picture: SUPPLIED
Picture: SUPPLIED

Technology group Jasco Electronics said on Friday it has agreed to sell its Electrical Manufacturers Division (EM) for R65m, which exceeds the group’s market capitalisation.

The sale of the unit to 100% black-owned African Zaibatsu should be concluded by end-April 2020, the group said.

EM primarily manufactures components for the domestic appliance industry in SA, but also produces swimming pool chlorinators and accessories.

The main product lines are electrical cord sets, metal pressings and assembled electrical products, which form part of the Snapper electrical range as well as various plastic-moulded products that are contract manufactured.

The move comes as Jasco rationalises its business operations, seeking to improve operating margins and performance as well as working capital management.

The company said in August that its group net debt to equity ratio had deteriorated from 56.5% in June 2018 to 65.3% in December 2018, after additional working capital funding.

The company, which had a market capitalisation of R57.3m at the time, was carrying more than R350m in debt on its balance sheet that it plans to reduce.

gernetzkyk@businesslive.co.za / With Mudiwa Gavaza