South African industrial company Metair has finalised the sale of its Turkish battery subsidiary Mutlu Akü.
Paul O’Flaherty, Metair CEO, told BEST the decision to divest was influenced by a combination of factors, primarily strategic in nature. “Turkey’s current economic landscape poses significant challenges, with high inflation, and our strategic focus is shifting towards growth opportunities in Africa, where we see great potential for expansion,” he said.
Operating in Türkiye has become increasingly complex and challenging due to several macroeconomic factors, he added. Inflation is running at approximately 75% and interest rates are at around 50%. “These factors have created an unpredictable environment, leading us to reconsider our strategies within the region.”
The OECD said in its December economic outlook that inflation is easing but remains high.
Metair’s sale of the Mutlu Group to Quexco Incorporated previously received the requisite shareholder approvals and the Turkish Competition Board confirmed no further consent is necessary.
Despite the economic conditions, Metair expects to close the transaction before the end of the year. One condition remains to be fulfilled, namely the execution by the relevant Mutlu Group companies of a new financing agreement with Turkish banks.
Disposal was for $110 million, Metair said. Mutlu Group’s debt and accounts payable have increased substantially since September as a result of the requirement to fund operations with hyperinflation and high interest rates. Metair expects net proceeds of $5 million to be realised. This is less than first expected but allows Metair to mitigate and deleverage financial risks. Mutlu was accounting for 73% of its interest costs and 23% of net debt.
Mutlu makes a range of lead-acid and lithium-ion batteries.
