JSE-listed manufacturer Metair, known for producing suspension springs, brake pads, shock absorbers, radiators, and air conditioners, announced the sale of its Turkish subsidiary, Metair Türkiye, to Quexco for R1.95 billion.
Metair, which also manufactures batteries for mobility applications and sectors such as telecoms, utilities, mining, and retail, has operated Metair Türkiye as part of its Energy Storage vertical. This subsidiary serves as the holding company for Metair’s Turkish operations, primarily consisting of the Mutlu Group.
Since acquiring the Mutlu Group in 2013, the Turkish division has contributed to Metair’s geographic and sector diversification. However, after a thorough review and restructuring of the Mutlu Group starting in 2022, Metair opted to sell the division.
Challenging macroeconomic conditions, including Türkiye’s hyperinflationary environment, created significant complexity and risk for the company. In 2023, the Mutlu Group faced additional setbacks, such as a shortage of contract workers and reduced export volumes, leading to a drop in profitability, increased debt, and higher working capital requirements.
“The decision to dispose of the Mutlu Group reduces Metair’s exposure to these operational challenges and enhances the overall risk profile of the company,” Metair explained.
The Mutlu Group specializes in manufacturing energy storage products, including lead-acid and lithium-ion batteries, for mobility applications as well as sectors like telecoms and mining. It supplies automotive batteries to major original equipment manufacturers (OEMs) in Türkiye and the automotive aftermarket through Metair’s distribution channels.
As of December 2023, the net assets of Metair Türkiye were valued at R2.9 billion, with a loss of R70.6 million attributed to the subsidiary during that period.
The sale to Quexco, a private holding company founded in 1984 and led by Chairman Howard Meyers, is expected to be finalized once conditions are met or waived. Quexco has a long history in the battery and lead mining industries and has operated across the EU, North America, and South Africa.
Metair views this disposal as an opportunity to address three key liquidity challenges: recapitalizing Hesto Harnesses, settling existing debt, and refinancing group-wide debt. By offloading the Mutlu Group, including its operational debt, Metair aims to significantly strengthen its balance sheet.
“The sale allows Metair to unlock value from its investment in the Mutlu Group and potentially drive a rerating of its share price,” the company noted. “Post-disposal, Metair will focus on its core automotive component manufacturing business in South Africa, with an eye on becoming a key player in the growing Sub-Saharan African mobility sector.”
With the proceeds from the sale and a stronger financial position, Metair plans to concentrate on expanding its operations and generating value for shareholders in the African market.
