Metair Investments disposal of its division in Turkey hit by economic and geopolitical turbulence over the past few years for R2.95 billion to Quexco, a US investment holding company, adds to a growing list of South African companies that are finding the going tough offshore.
The Turkish economy has struggled against inflation and an implosion in its lira currency that according to S P forecasts is likely to weaken further this year. Metair expanded to Trkiye in 2013, seeking to diversify its operations.
Yesterday, the company announced that it had entered into a sale and purchase agreement with Quexco Incorporated for the disposal of its entire shareholding in Metair Trkiye. The disposal will be for a cash consideration of R1.95bn based on the rand/dollar exchange rate of R17.76/$1, with shares in Metair surging 9.26% to R16.40 in afternoon trade on the JSE yesterday.
The political and economic scene in Turkey has dramatically change in the last years there is uncertainty regarding Turkish economic policy and inflation has gone through the roof. The Turkish lira has completely collapsed, Anthony Clark of Smalltalkdaily Research told Business Report in an interview.
Metair admitted as much, saying yesterday that the Mutlu Group was operating under challenging macroeconomic conditions that, together with the current hyperinflationary environment in Trkiye had introduced significant complexity and risk for the company.
