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Finalisation of AutoZone acquisition, update regarding disposal of Metair’s Turkish operations & debt restructuring
METAIR INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1948/031013/06
ISIN: ZAE000090692
JSE and A2X share code: MTA
("Metair" or the "Company" or the ""Group")
FINALISATION OF THE AUTOZONE ACQUISITION, UPDATE REGARDING THE DISPOSAL OF METAIR'S TURKISH OPERATIONS AND DEBT RESTRUCTURING PROCESS
FINALISATION OF THE AUTOZONE ACQUISITION
Further to the announcement published on SENS on 4 October 2024, Metair wishes to inform shareholders
of the finalisation of the acquisition of AutoZone Holdings Proprietary Limited ("AutoZone"). The remaining
conditions precedent have been approved and finalised, namely approval from the South African
competition authorities, Metair lenders' consent, and counterparties to certain AutoZone contracts
consenting to the acquisition by Metair. In addition, all regulatory filings from AutoZone's business rescue
practitioners have also been made.
Metair, through its subsidiary Nikisize (Proprietary) Limited ("Nikisize"), has acquired the entire issued
share capital of AutoZone. The consideration, as of the completion date of 13 December 2024, comprises
a nominal amount for the acquisition of the shares in AutoZone and an aggregate amount of R278.5 million
advanced by Nikisize to AutoZone. Of this amount, R188.5 million is payable to ABSA to settle ABSA's
secured claim, R15 million to settle pre-commencement unsecured creditors and R75 million to fund the
working capital requirements of AutoZone.
The acquisition enhances Metair's ability to diversify strategically within the mobility and aftermarket
sectors. It aligns well with the increasingly active used vehicle market in South Africa as well as the
anticipated opportunity for growth in the aftermarket parts market. It provides Metair with an established
distribution channel to grow its current automotive aftermarket businesses in Southern Africa.
UPDATE REGARDING THE DISPOSAL OF METAIR'S TURKISH OPERATIONS
Unless otherwise defined herein, capitalised words and terms contained below shall bear the same
meanings ascribed thereto in the circular to Shareholders dated 30 September 2024 ("Disposal Circular").
Shareholders are referred to the Disposal Circular as well as the announcements published by Metair on
SENS on Tuesday, 17 September 2024, Monday, 30 September 2024, Wednesday, 30 October 2024 and
Tuesday, 12 November 2024 pertaining to the Disposal.
The Disposal was approved by the requisite majority of Shareholders on Tuesday, 29 October 2024, and
Shareholders were subsequently informed that on 7 November 2024, the Turkish Competition Board had
confirmed that its consent is not required in respect of the Disposal.
Implementation of the Disposal remains subject to the fulfilment or waiver of the remaining Condition, being
the execution by the relevant Mutlu Group companies of a new financing agreement with Turkish bank/s to
be agreed with the Purchaser. Economic conditions remain challenging but good progress has been made
with the Closing Date now expected before the end of December 2024. A further SENS announcement will
be made once Closing has occurred.
The Disposal Consideration of US$110 million was subject to customary adjustments based on
Mutlu Group's net debt and working capital amounts on the Closing Date. Mutlu Group's debt and accounts
payable has increased substantially since September 2024 as a result of the requirement to fund operations
in the continued challenging hyper-inflationary and high-interest rate environment. It is currently expected
that net proceeds of approximately US$5 million will be realised.
While the Group is disappointed that the final aggregate consideration is expected to be less than
envisaged, it believes that the Disposal is a critical element of Metair's successful turnaround.
The Mutlu Group accounted for approximately 73% of Metair's total interest cost and 23% of Metair's
net debt for the six months ended 30 June 2024 and it was essential to mitigate against the increasing
financial volatility of and exposure to the Mutlu Group.
Metair will now also be able to focus more comprehensively on its growth and diversification strategy in the
mobility sector.
DEBT RESTRUCTURING
As previously reported in the Group's interim results for the six-month period ended 30 June 2024, the
Group's net debt amounted to R5.5 billion as at 30 June 2024. This figure included the debt and guarantees
associated with Hesto Harnesses (Proprietary) Limited ("Hesto"), in which the Group holds a 75%
ownership stake.
Management has been focused on optimising and deleveraging its debt position. Metair's board of directors
("Board"), with support from external lenders, has approved a temporary restructuring of Metair's debt
through an extension of the existing Bridge Facility ("Bridge") from Standard Bank of South Africa Limited,
which was created in July 2024 to rebalance a portion of the Hesto shareholder debt of Yazaki Corporation
("Yazaki") amounting to US$38.1 million. The extended Bridge will be utilised for the redemption of
Preference Shares of R840 million, due on 17 December 2024, R278.5 million relating to the acquisition of
AutoZone and an additional US$10 million to further rebalance the Yazaki shareholder loans.
The funders of Metair's debt facilities have consented to the above. With full support from the funders, an
executable final optimal capital restructuring of Metair will be presented to the Board and the funders before
31 March 2025.
YEAR END RESULTS
The Group intends to release its 2024 audited annual results for the year ending 31 December 2024 on or
about 26 March 2025 with an operational update being published in February 2025.
Johannesburg
17 December 2024
Sponsor
One Capital
Date: 17-12-2024 07:05:00
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