The battery production line of Metair Investments' subsidiary First National Battery. Metair has successfully extended and restructured its debt portfolio..
Image: Simphiwe Mbokazi/Independent Newspapers
Metair Investments, the JSE-listed auto component and battery manufacturer, said Monday it has extended its refinanced debt of R3.3 billion to five years, and repayment terms have been eased.
Last March, a capital restructuring plan was announced between Metair and its main lenders, which involved two separate packages, with subsidiary Hesto Harnesses owing R1.38bn, while the remaining South African subsidiaries owed R3.3bn.
Metair’s board said Monday that their main lender, Standard Bank of South Africa, had agreed to a refinancing of the debt, from April 30, 2026, which allows for a repayment profile that matches expected earnings growth and cash flows, including elevated capital expenditure planned for 2026, to cater for a key customer model changeover.
“A primary objective of the refinance was to address the maturity of the R1.6bn Subordinated Loan (Facility C), which had been due to be repaid by June 30, 2027.
“This facility has now been converted into a conventional senior term loan repayable over five years, thereby enhancing the sustainability of the company's capital structure,” Metair’s board said.
The current security package remains unchanged, with all the group's SA assets and cash flows being provided as security for the debt facilities.
The interest rates and debt covenants had also been renegotiated, and the reference rate had transitioned from JIBAR to the South African Overnight Index Average (ZARONIA), in line with prevailing market convention.
“Importantly, the cumulative earnings before interest, tax, depreciation, and amortisation (EBITDA) performance hurdle has been removed from the revised debt structure,” the board said.
Under the previous financing arrangement, the company was required to meet cumulative quarterly EBITDA targets, failing which it would have been obliged to pursue remedial actions, including, inter alia, a potential equity raise and/or asset disposals.
“This requirement has been eliminated under the revised structure, providing the company with enhanced operational flexibility and reducing the risk of forced capital actions,” Metair’s board said.
The working capital facility of R600 million, inclusive of R75m ringfenced for 75% owned Smiths Manufacturing, remained unchanged but would be subject to review during the third quarter.
“The refinance represents a significant milestone in strengthening Metair's capital structure and positioning Metair to execute on its strategic and operational priorities over the medium term,” the board said.
For the year ended December 31, 2025, and including a R413m fine for Rombat, the group reported a 23% uplift in operating profit to R674m, while the headline loss per share came to 21 cents versus headline earnings per share of 105 cents the previous year.
Metair's Romanian battery-making subsidiary Rombat was fined by the European Commission due to a competition law infringement.
Metair’s share price was untraded at R5.19 on Monday afternoon, a price that had slipped over 50% over 12 months.
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