LIFE WITHOUT THE WESSELS
FOR YEARS A SUBSIDIARY of Wesco – and thus indirectly controlled by the Wessels family – Metair makes components for the automotive industry. About half of its turnover represents original equipment sales to South African manufacturers (not least Toyota, in which the Wessels family is also involved), 25% is exported and the balance either for the after market or not auto-related.
Last December, Wesco and the Wessels family sold their entire interest to Coronation Capital, Royal Bafokeng Holdings and a staff share incentive trust. On 5 March 2007 the shares were subdivided 25 ways. OPPORTUNITIES • The record is excellent and the SA motor assembly indus-
try continues to flourish. • Thanks to its conservative dividend policy, the balance sheet is strong. Fixed assets have risen from R280m to R614m since 2002, but over the same period interestbearing debt has fallen from R93m to R18m. • The introduction of the Royal Bafokeng as a shareholder
strengthens Metair’s black empowerment credentials. RISKS • The share has historically been difficult to trade. In 2006, weekly turnover on the JSE was only R1,8m and just 5,7% of the equity changed hands through the market. A high unit price also deterred small investors. The share subdivision has overcome that, but whether the new major shareholders will seek to overcome the broader liquidity problem is still an open question. • Though Metair has always had its own management, it remains to be seen whether any slackening of effort follows the withdrawal of the Wessels family’s influence.