LIFE WITH­OUT THE WES­SELS

Finweek English Edition - - Companies & markets - MICHAEL COUL­SON

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.

METAIR IN­VEST­MENTS

Source: I-Net Bridge

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