METAIR Investments, the listed automotive component manufacturer and distributor, has signed legal agreements for R1.4 billion in preference shares to refinance the facilities extended by Absa for the acquisition of Turkish battery maker Mutlu Akü.
The refinancing, including a R750 million revolving credit facility that will be used for general corporate purposes, was through its wholly owned subsidiaries Inalex and Nikisize.
Absa, Investec and Standard Bank committed to the revolving credit facility while Standard Bank committed to subscribe for the entire preference share issuance.
Absa, acting through its corporate and investment banking division, served as advisor to Metair and global co-ordinator on the transaction.
The preference shares carry a dividend rate of 69 percent of South African prime rate and are redeemable over five years, starting (in) three years and one month from the issue date.
The revolving credit facility has a tenor of five years and carries a margin of 2.05 percent over the relevant Johannesburg Interbank Agreed Rate (Jibar) rate. Final closing of the financing is subject to the fulfilment of conditions precedent.
In a transaction valued at R2.17bn, Metair in October announced the 100 percent acquisition of the issued share capital of Mutlu Holding, giving it an effective 75 percent interest in Mutlu Akü.
This was followed by a mandatory tender offer to minority shareholders for the remaining 25 percent not held by Mutlu Holding, which closed in March and increased its shareholding in Mutlu Akü to 96.7 percent. The company launched a “squeeze out” transaction in July to acquire the remaining 3.57 percent shareholding it did not already own.
Theo Loock, the managing director, said on Friday that the group was happy with the outcome of the financing and to see its partner banks were strongly supportive of the group’s strategy and transactions that brought them closer to realising their vision for the company.
“The acquisition transformed Metair into a key player in the Emea (Europe, Middle East and Africa) region. This strengthens our relevance to our OEM (original equipment manufacturer) client base while at the same time provides us access to an attractive and growing after-market segment.”
Financial director Sjoerd Douwenga said the group achieved its key objectives on the funding. These were to secure financing at very competitive rates and a structure that provided the group with the flexibility to pursue future strategic opportunities, and to strengthen its relationship with a group of core relationship banks that had the ability to support Metair with its strategic plans domestically, regionally, and internationally, he said.
Metair’s strategy is to establish a manufacturing footprint in Africa before pushing ahead with transforming itself into a global manufacturer.
He said earlier Metair aimed to expand its capacity into the continent in the second half of this year by entering into small partnerships or distribution arrangements or technology transfer agreements. Once it had achieved this, it could then move to the next phase to be a global manufacturer by having a presence on each of the major continents, he said.
Loock said it would take about two-and-a-half years to transfer its technology to new partners in Africa, bed any acquisitions down and get some security for the take-up of its spare capacity. He said the group would start looking at its international globalisation strategy from 2016 until 2018.
Shares rose 1.46 percent to close at R38.10 on Friday.