Metrofile sells its Zambian unit for undisclosed amount
Metrofile’s takeover by Housatonic Consortium has been delayed by Covid-19, with local investors now getting involved
JSE-listed documents storage company Metrofile has sold its Zambian business as the company continues its planned exit of non-core operations.
On Tuesday, Metrofile told shareholders that it has disposed of its 60% stake in Metrofile Zambia but has retained the Metrofile brand in that territory.
The deal is in line with its strategic review to investors in 2019, that it will dispose of non-core, non-scalable and underperforming operations to focus on its core activities and geographies “to optimise capital allocation and returns to enhance value for shareholders”, the company said.
Metrofile did not disclose how much the deal was worth.
Zambia made up part of its rest of Africa operations, which also consist of Kenya, Botswana and Mozambique. The segment saw its revenue increase by 3% to R54m as a result of an improvement in net box-volume growth of 5% for the six months to end-December 2019.
In March, the group said its strategic review and restructuring was beginning to bear fruit, with the company reporting a 12% increase in interim operating profit. Revenue from continuing operations increased by 8% to R473m compared to R438m previously.
In terms of other transaction activity, the Covid-19 crisis has put the takeover of Metrofile by US private equity firm, Housatonic Consortium on hold.
In the second half of 2019, the Housatonic made an offer to acquire 100% of the group for R3.30 a share. Metrofile said the uncertainty arising from the pandemic, as well as the lockdown in SA, resulted in Housatonic not being in a position to finalise its arrangements with potential funding and BEE partners as originally intended.
To facilitate the BEE requirements of Housatonic, Metrofile said in April that the Mineworkers Investment Company (MIC) and Sabvest have agreed in principle to partially re-invest with the US company through a special purpose vehicle that will own 25.1% of Metrofile, if the transaction is concluded.
The deal, which was expected to be concluded at the end of May, has been delayed because of the Covid-19 pandemic.
Housatonic has said it will need to see three months of normal trading and revised projections and debt levels before a firm offer and funding can be finalised.
Shares in Metrofile closed 1.21% higher on Tuesday at R2.51, giving the firm a market capitalisation of R1.14bn.