Allied Holdings may sell off subsidiary

As losses continue to grow for Ga.-based car hauler Allied Holdings, Inc., the company is considering selling one of its subsidiaries to generate cash. Allied has engaged Bear, Stearns & Co. to explore the possibility of selling its Axis Group subsidiary, which is a non-asset based logistics provider to the finished vehicle market in the U.S. and overseas. Formed in 1996, Axis provides a wide range of services, which include vehicle processing and transportation at ports and inland distribution centers, and equipment for containerized international shipment. It also provides vehicle inspections, the removal/installation of exterior protective coatings, mechanical adjustments and repairs, vehicle washing and transportation logistics.

Direct revenues for Axis totaled $28.5 million for 2000, though its reported revenues are net of transportation costs, which were approximately $20 million last year. That excludes monies generated from joint ventures overseas in the United Kingdom and Brazil, said Allied.

Allied said it is taking this step in order to “protect” what it considers to be its core business – car hauling. “We would expect to use a substantial portion of any sales proceeds to reduce our indebtedness,” said Hugh E. Sawyer, Allied president & CEO. “Allied will not compromise our long-standing commitment to our core car-hauling business.”

Allied recently reported that its second-quarter revenues declined 15%, resulting in a loss of $5.7 million. Through the first six months of 2001, Allied has posted losses of $24.6 million, compared to net income of $5.9 million for the same period in 2000.