Offshore investment: 99% lost

Spar Group's misadventure in Poland cost it R4.2 billion.

- 

Yet another South African industrial business with ambitions of empire-building in far-off markets has been forced into selling the business in a rush for 99% less than it paid for it just over a decade ago.

This is not quite Spar Group levels of insanity, which lost R4.2 billion on its misadventure in Poland after buying a family-owned chain of supermarkets for the token sum of €1 (about R20 today). In that transaction, it is literally paying the acquirer the R185 million it will "get back" as the purchase price.

Here, at least the listed industrial business will get a tiny bit of cash.

Metair bought Mutlu, a battery (though this would quickly change to "energy storage") business in Türkiye, in December 2013 for $217 million (about R4.1 billion).

The plan was simple: to capitalise on its and Mutlu's relationships with carmakers (original equipment manufacturers or OEMs) across Europe, the Middle East, and Africa and start producing start/stop batteries in Türkiye. After all, Mutlu was the biggest battery manufacturer in Türkiye, never mind that the largest percentage of Mutlu Akü's exports were to customers in Russia.

At the time, CEO Theo Loock told SAfm Market Update with Moneyweb that: "We worked for four years to conclude the acquisition, so we knew the company very well, and we normally... [inaudible] in the first two years of an acquisition to its third-year value out the company.