Africa‘s biggest bank, in terms of assets, Standard Bank, has reported that it has successfully worked with South African automotive group Metair to restructure the latter’s debt. Metair is valued on the JSE at more than R1.1-billion.

Standard Bank acted as the Mandated Lead Arranger and Global Coordinator for this restructuring and refinancing process. “The [automotive] industry is a key part of South Africa’s economy, and we believe that deals like this will serve the sector and benefit the country in the long-term,” explained Standard Bank Corporate and Investment Banking head of debt financing solutions Brydone Graham.

Metair operates in two segments – the manufacture of automotive components, and aftermarket parts and services. Metair sought to restructure its balance sheet, including a refinancing of its existing debts. This was necessary, to allow the group to rebalance a shareholder in its Hesto subsidiary.

“We always work closely with partners, where possible, to find innovative solutions to financial challenges that affect key sectors of the economy,” he affirmed. “We are invested in co-creating with our clients on long-term solutions, and we are particularly proud to have found a practical way to help Metair return to a financially sustainable position.”   

The result was that the automotive group was now able to reduce its debt. It was also able to rebalance the repayments profile so that this would now match its earnings growth and cash flows.

“We are pleased to have a working relationship with a trusted lead financial partner that understands challenges across key sectors of the economy and is positioned to support with innovative financial solutions,” said Metair Investments CE Paul O’Flaherty. “We believe that with this new debt arrangement, Metair Group will be in a stronger position to deliver value in a way that benefits the wider automotive sector.”

The South African automotive industry exported 39 477 vehicles in March. This was a 15.7% increase over the past two years.