Metair ‘to sell off batteries business’, shareholder claims

Metair ‘to sell off batteries business’, shareholder claims

Metair ‘to sell off batteries business’, shareholder claims 600 600 Batteries International

February 24, 2022: South Africa-based Metair is preparing to sell off its lead and lithium battery businesses including Rombat and Mutlu Akü, one of the company’s newest shareholders, Truffle Asset Management, claimed on February 21.

Truffle acquired a 5.28% stake in Metair for an undisclosed sum, according to a Johannesburg Stock Exchange announcement on January 24.

Now Truffle has told Batteries International one of the reasons for investing was because “we believe Metair could soon announce its intention to dispose of its energy storage division — the batteries business”.

Metair’s energy storage division mostly comprises its battery businesses in countries including Turkey (Mutlu Akü), Romania (Rombat) and South Africa (First National Battery) a Truffle spokesperson said.

“We believe a fair valuation could be around five-to-six times an Ebitda [earnings before interest, tax, depreciation, and amortization] multiple which, if executed on, should unlock significant value for shareholders,” said the spokesperson.”

Other “significant growth” to come from Metair includes contributions from a “significant automotive components contract” Truffle said Metair signed with Ford South Africa in 2021 — “from which they will generate an additional ZAR3.5 billion ($232.5 million) revenue per annum for the next 10 years”.

Truffle said: “This contract will contribute meaningfully from January 2023 and should add around ZAR1.00 per share in the company’s headline earnings per share from fiscal year 2023 onwards (+30% on their pre-Covid earnings of ZAR3.36 per share).”

A Metair spokesperson said the company was not expected to comment on Truffle’s claims in its quiet period ahead of its release of annual results on March 17.