South African automotive components manufacturer Metair Investments has successfully signed legal agreements for R1.4-billion in preference shares for the refinancing of facilities extended by Absa Bank to support the acquisition of Turkish battery manufacturer Mutlu Akü, the company announced on Friday.
The refinancing also included a R750-million revolving credit facility that would be used for general corporate purposes.
Absa Bank, acting through its corporate and investment banking division, as well as Investec and Standard Bank have committed to the revolving credit facility, with Standard Bank having committed to subscribe for the entire preference share issuance.
“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 Europe, Middle East and Africa region. This strengthens our relevance to our original-equipment manufacturer client base, while at the same time [providing] us access to a very attractive and growing after-market segment,” Metair MD Theo Loock said.
Meanwhile, Metair FD Sjoerd Douwenga stated that the company had achieved its key objectives in terms of the funding, namely to secure financing at competitive rates and a structure that provided the company with the flexibility to pursue future strategic opportunities, while also strengthening its relationship with a group of core relationship banks that could support the company’s strategic plans domestically, regionally and internationally.
The preference shares carried a dividend rate of 69% of South African prime rate and were redeemable over a period of five years, starting three years and one month from the date of issuance.
The revolving credit facility had a tenor of five years, and carried a margin of 2.05% over the relevant Johannesburg interbank average rate.
The final closing of this financing was subject to the fulfillment of conditions precedent customary for a transaction of this nature.
Metair announced the Mutlu Akü acquisition in October 2013, and launched a mandatory tender offer to minority shareholders in February of this year. The company announced in July that it 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.