Eclipx Group says it has received interest “from a number of parties” for GraysOnline and Right2Drive, despite the underperforming businesses forcing the company to take up to $130 million in first-half impairments.
Eclipx announced on Monday that softer vehicle sector conditions and a failure to properly integrate the recently purchased businesses had resulted in lower than expected earnings in the six months to March 31.
Eclipx bought auction site GraysOnline for $179 million in 2017, and accident loan car provider Right2Drive for $67 million in 2016.
Eclipx told the ASX it expects to lower the value of goodwill of both businesses in its audited first-half results on May 24, with a non-cash impairment charge of between $110 million and $130 million.
The company said the businesses are being prepared for sale to pay down net debt, which was $259.4 million at March 31.
“Eclipx confirms that it has received interest from a number of parties,” the company said in a release.
Eclipx also announced on Monday that group managing director and chief executive Doc Klotz will step down immediately, to be replaced by Julian Russell as new chief executive.
Bevan Guest, the current managing director of Fleet Australia, has been promoted to a newly created chief commercial officer position.
Shares in Eclipx fell more than seven per cent in early trade and were still down 2.6 per cent at 93.5 cents cents by 11:15 AEST – more than 70 per cent lower than a year ago.
The company’s share price tumbled in March after McMillan Shakespeare called off its proposed $911 million takeover of the group on a poor trading update from its target.
Eclipx, which also intends to sell its Australian commercial equipment financing business, does not anticipate the expected non-cash impairment charge to result in a breach of the group’s relevant debt covenant position.