Energy storage and automotive component manufacturer Metair says it will sell its troubled Mutlu operations in Türkiye to Quexco for R1.95-billion in cash.

Mutlu forms part of Metair’s Energy Storage vertical. The business manufactures and trades energy storage products, including lead-acid and lithium-ion batteries for use in mobility applications, as well as in the telecoms, utility, mining, retail and materials-handling sectors.

Automotive batteries manufactured by Mutlu are supplied to vehicle manufacturers in Türkiye.

Batteries are also sold into the automotive aftermarket through Metair’s Energy Storage vertical’s aftermarket distribution channels and franchised retail networks.

The value of Metair Türkiye’s net assets was R2.9-billion, as at the end of last year, and the loss attributable to the business R70.6-million.

Quexco was founded in 1984. It is a private holding company with interests in the lubricants industry, among others.

The company was founded and is wholly owned by chairperson Howard Meyers.

Quexco historically held investments in lead mining, smelting and recycling, as well as in battery distribution and, through its past affiliates, operated 17 non-ferrous smelting and refining facilities, as well as three anode and flat-roll-producing facilities, with operations in the EU, North America and South Africa.

Metair acquired Mutlu in 2013, which provided the JSE-listed group with geographic and sector diversification.

Plagued by high debt levels, a challenging Turkish economy, and trouble at its Hesto Harnesses subsidiary, Metair has, however, been forced to revisit its business operations over the last two years.

Metair says Mutlu operates under challenging macroeconomic conditions that, together with the current hyperinflationary environment in Türkiye, have introduced “significant complexity and risk to the Metair group”.

Mutlu last year also faced a number of additional challenges, including a shortage of contract workers and a loss of export volumes, resulting in a drop in profitability, along with higher debt levels and increased working capital.

Metair believes the proceeds from the sale will enable it to recapitalise Hesto Harnesses; contribute to the settlement of current debt and allow for the refinancing of its own debt; while it will also strengthen the Metair balance sheet, as Mutlu will be sold with its operational debt.

Following the disposal, Metair says it will primarily be an automotive component manufacturing business focused on South Africa, with the added focus of being a key player in the sub-Saharan African mobility sector.