Investors queue to buy Avis owner’s Ghana business

Car rental, leasing and sales group Zeda has attracted suitors for its Ghana business, which it has put up for sale, with the group expecting to conclude the sale before the end of this year — ending its 25 years of investment in the country.

The company, which operates the Avis and Budget car rental businesses, took a decision in November to disinvest from Ghana, as the West African country continued to bleed multinationals.

“Following the board’s decision to divest from Ghana, the disposal process has commenced and is attracting several interested parties,” Zeda said on Tuesday.

“We remain committed to divesting from our Ghana investment by the end of the calendar year and redirecting our resources to other portfolios.”

The decision to exit Ghana follows several years of a stagnant economy and significant currency devaluation.

One of the reasons advanced by Zeda to let go of its Ghana business is that capital allocation no longer fits the group’s growth focus, given its “isolation within the West African market”.

Zeda, spun off from Barloworld two years ago, operates in SA and has a footprint in 10 other Sub-Saharan African countries, including in Zambia, Namibia, Lesotho and Mozambique.

The group’s share price rose 5% on Tuesday after the update on the Ghana business sale and published interim results, which showed the company is making serious headway in its heavy commercial vehicles business, with the fleet growing by 31% compared to 2024.

This growth contributed to the 4% revenue growth reported by the leasing business in the six months ended March, with the unit benefiting from a consumer shift that required more service delivery. The heavy commercial segment contributed 15% to its leasing revenue.

Zeda’s greater Africa operation reported 15% growth in operating profit buoyed by the performance in Zambia, Namibia and Lesotho, which offset a decline in Mozambique after unrest caused by political instability.

The group’s car rental business, which is home to more than 20,000 vehicles in Southern Africa, faced pressures in the reporting period, due to high rental industry fleet volume and subdued demand.

The company, which reported revenue of R5.18bn in the period under review, a 1.6% decline from the previous period, said the first half was characterised by a challenging trading environment.

“We observed clear signs of strain across corporate SA, reflected in delayed investment decisions, including fleet replacement, holding on to vehicles for a longer period, and opting for extensions of contracts. Similar strain was evident among SMEs, particularly in the mining and transport sectors,” it said.

The group, worth R2.2bn on the JSE, said SA’s car sales market continues to evolve rapidly, driven by the growth of Asian original equipment manufacturers.

“The entrance of these nontraditional brands continues to drive downward pricing pressure. The existing traditional brands have responded with aggressive discounts, to protect their market position.”

Chinese car brands have been defying market challenges in SA, having registered sales growth consistently since 2022, with Haval emerging as the most popular brand.

khumalok@businesslive.co.za