Metair secures R1.4 billion in preference shares funding

Metair secures R1.4 billion in preference shares funding
  • and R750 million syndicated revolving credit facility

15 August 2014 - Metair Investments Limited (“Metair” or “the company”), acting through its two wholly owned subsidiaries Inalex Proprietary Limited and Nikisize Proprietary Limited, successfully signed legal agreements for R1.4 billion in preference shares for the refinancing of the facilities extended by Absa Bank Limited for the purpose of supporting the acquisition of Turkish battery manufacturer Mutlu Akü. The financing also included a R750 million revolving credit facility that will be used for general corporate purposes.

The preference shares carry a dividend rate of 69% of South African prime rate, and are redeemable over a period of 5 years starting 3 years and 1 month from the date of issuance. The revolving credit facility has a tenor of 5 years, and carries a margin of 2.05% over the relevant JIBAR rate. The final closing of the financing is subject to the fulfillment of conditions precedent customary for a transaction of this nature.

Absa Bank acting through its Corporate and Investment Banking Division, Investec, and Standard Bank committed to the revolving credit facility, while Standard Bank committed to subscribe for the entire preference share issuance. Absa Bank acting through its Corporate and Investment Banking Division acted as advisor to Metair and Global Coordinator on the transaction. “We are very happy with the outcome of the financing, and to see that our partner banks are strongly supportive of our strategy and transactions that bring us closer to realising our vision for the company.

“The Mutlu Akü acquisition transformed Metair into a key player in the EMEA region. This strengthens our relevance to our OEM client base while at the same time provides us access to a very attractive and growing after-market segment,” Theo Loock, Managing Director of Metair said.

“We achieved our key objectives on the funding: to secure financing at very competitive rates and a structure that provide us with the flexibility to pursue future strategic
opportunities, and to strengthen our relationship with a group of core relationship banks that have the ability to support us with our strategic plans domestically, regionally, and
internationally,” added Sjoerd Douwenga, Financial Director of Metair.

Metair announced the Mutlu Akü acquisition in October of last year, and launched a Mandatory Tender Offer to minority shareholders in February of this year. The company announced in July that they had initiated a ‘minorities squeeze-out’ transaction to achieve 100% ownership of Mutlu Akü, compared to 96.7% currently, subject to obtaining the required regulatory approvals in Turkey.