In the media

Bafokeng buy Metair shares for R152m cash

7 February 2007

Source: Business Report

Publication: Business Report Online

[Roy Cokayne] Pretoria - Royal Bafokeng Holdings (RBH), the broad-based black economic empowerment (BEE) investment company, has acquired 606 581 shares in listed automotive components company Metair from the Wessels Family Trust for R152 million cash.

The transaction represents the first major empowerment deal in the automotive manufacturing sector. It follows Wesco Investments, which owns a 25 percent stake in Toyota South Africa, selling its 39 percent stake in Metair in December to specialist equity investment company Coronation Capital (Corocap) for R591 million cash.

Corocap entered at the time into an option agreement with trusts and companies associated with the Wessels family, along with other investors, to acquire a further 10 percent of Metair, representing 651 279 ordinary shares at R250 a share.

Albert Wessels was the founder of Toyota South Africa, his son Bert was the company's chief executive until his death and Elizabeth Bradley, his daughter, is Wesco's chairman.

Theo Loock, Metair's chief executive, said yesterday that he was delighted to welcome RBH as a strategic shareholder in Metair and looked forward to building a successful long-term relationship with them.

Loock said the offer by Corocap and its nominees to buy the Wessels Family Trust and Wesco Investments shareholdings in Metair had made it possible to facilitate this empowerment transaction.

“Metair has always had a strong relationship with its strategic shareholders. With Corocap and RBH as the new strategic shareholders, there is a new dynamic and energy which will no doubt be very exciting for Metair and all its stakeholders,” he said.

There is no BEE charter for the automotive industry, but automotive component manufacturers, such as Metair, have come under pressure from original equipment manufacturers to strengthen their BEE credentials. Metair confirmed that it had had several discussions with Toyota SA on this issue.

Johan van Zyl, the president and chief executive of Toyota SA, said he was delighted with RBH's decision to invest in Metair. “This is the first major broad-based BEE investment in component manufacturing in South Africa and Toyota would like to see many more.”

Loock said last year when the Wesco Corocap transaction was announced that Metair had built a strong balance sheet and had a lot of cash, which could be used for growth.

He said the transaction represented the start of a new aggressive look at what was available in the market. Corocap's knowledge and experience would assist Metair in this corporate activity.

Loock added that the core of the Metair business would remain the automotive industry, but the buyers would like to diversify, including into the automotive aftermarket industry.

Mpueleng Pooe, an RBH public affairs executive, said the investment in Metair allowed it not only to diversify its portfolio but to seize an opportunity to participate in the automotive component manufacturing sector. “Metair has an exciting growth platform and we look forward to working with [Loock] and his team to build value for all stakeholders.”

RBH, established in April last year, is responsible for the management and development of the commercial assets of the Royal Bafokeng Nation.