Metair concludes Autozone deal

The transaction, effective from 13 December, includes a nominal consideration for the shares at a total of R278.5m.

JSE-listed Metair has completed the acquisition of Autozone, having received all the necessary approvals from the relevant authorities and lenders, the group announced in a statement.

The group’s share price traded at R10.85 in early morning trade – 0.28% lower than on Friday.

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Moneyweb reported earlier that Metair would buy the distressed AutoZone as part of Autozone’s business rescue plan.

Read:
Metair’s acquisition of AutoZone ‘opportunistic’
Metair strikes a R290m deal for AutoZone
AutoZone enters voluntary business rescue

The transaction, effective from 13 December, includes a nominal consideration for the shares and at a total of R278.5 million. Of this amount, R188.5 million is payable to Absa to settle the bank’s secured claim, R15 million to settle pre-commencement unsecured creditors, and R75 million to fund AutoZone’s working capital requirements, Metair notes.

The group, an international manufacturer, distributor, and retailer of automotive components and energy storage solutions, also provided an update on the disposal of its Turkish operations – the Mutlu Group.

Sale of Mutlu Akü

Metair announced on 17 September its intention to dispose of its entire shareholding in Metair Türkiye for R1.95 billion. Metair Türkiye forms part of Metair’s Energy Storage vertical and operates as the holding company of Metair’s Turkish operation, which comprises the Mutlu Group.

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“The sale of the Mutlu Group to Quexco Incorporated previously received the requisite shareholder approvals, and the Turkish Competition Board confirmed that no further consent is necessary,” it notes.

In addition, progress has been made in fulfilling the remaining condition—the execution by the relevant Mutlu Group companies of a new financing agreement with Turkish banks.

Metair expects the transaction to be closed by the end of December 2024.

The disposal consideration of $110 million (approximately R2 billion) is subject to customary adjustments based on Mutlu’s net debt and working capital amounts on the closing date.

Metair expects the net proceeds of the sale will be $5 million (around R89 million).

Mutlu’s debt and accounts payable have increased substantially since September 2024 due to the requirement to fund operations in Turkey’s hyper-inflationary and high-interest rate environment, which has also resulted in a lower-than-expected final consideration, Metair notes.

Listen: Metair se omset styg met 14%

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“[H]owever, this transaction has always been critical for Metair’s strategic turnaround,” says Paul O’Flaherty, Metair CEO.

Mutlu accounts for 73% of Metair’s interest costs and 23% of its net debt for the six months ended 30 June 2024, he adds.

“[T]his move allows us to mitigate and deleverage financial risks and sharpen the focus on our growth and diversification strategy in the mobility sector.”

Debt restructuring

In tandem with the acquisition and disposal activities, Metair is optimising and deleveraging its debt position, which, as previously reported, stood at R5.5 billion as at 30 June 2024.

With support from external lenders, the board of directors has approved a temporary debt restructuring through an extension of the existing bridge facility to facilitate debt optimisation and support upcoming financial obligations.

Read: Paul O’Flaherty appointed Metair’s new CEO

“The bridge facility extension will redeem the outstanding preference shares, fund the AutoZone acquisition and further rebalance shareholder loans in Hesto,” Metair notes.

A comprehensive capital restructuring plan is expected by the end of March 2025, and the group intends to release its audited financial results for the year ended 31 December 2024 on or around 26 March.

Another operational update is scheduled for February 2025.

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