Prominent South African company is back from the brink of disaster

Automotive parts retailer AutoZone has emerged from business rescue in much better shape. It is now under Metair’s ownership and is eyeing future growth. 

South Africa’s largest automotive parts retailer has experienced a decade of turmoil, from a large private equity deal and a mountain of debt to the pandemic and South Africa’s stagnant economy. 

It is now wholly owned by Metair, which saved the company from business rescue in December 2024 for a total cost of R278.5 million. 

AutoZone’s troubles began in 2014 when, after a period of strong growth, the company was sold to a private equity firm. 

The parts retailer had benefited from South Africa’s strong economic growth throughout the 2000s and its booming new and used car markets. 

However, the private equity deal structure relied heavily on continued high growth, a target that became increasingly difficult to meet amid stagnant economic conditions.

AutoZone also lost a key government tender and was hit by global shocks, including the COVID-19 pandemic and geopolitical instability.

A combination of these factors resulted in the company’s inability to meet its debt-servicing obligations, and it increasingly had to cut costs and operations to try to pay off its debt. 

Towards the end of 2021, the company said it became clear that operations were contracting below break-even levels. 

Absa, Autozone’s primary lender, agreed to provide the company with some relief and gave it quarterly debt-service holidays. 

This, along with a recapitalisation of AutoZone, managed to return the company to break even but failed to grow beyond that. 

Absa finally ran out of patience on 30 June 2024 and declined to give another extension following the failure to sufficiently recapitalise the business.

This put AutoZone at risk of liquidation, with its 214 retail branches and 33 franchisee branches at risk of closing their doors. 

Back from the brink

“By the time we entered business rescue, the need to rebalance our debt had become critical,” Dion De Graaff, CEO of AutoZone, said.  

“Business rescue gave us the legislative space to stabilise and find a buyer who could set us on the right trajectory.”

Crucially, AutoZone’s Business rescue practitioners (BRPs) concluded that there was a reasonable chance of rescuing the company. 

The BRPs took effective control of AutoZone during the process, implementing a daily payment approval process and a weekly stock-ordering system which focused on top-selling items. 

While running the company, the BRPs engaged with several parties interested in buying AutoZone, which desperately needed capital. 

They selected Metair as the buyer, which acquired the business in December 2024 for R278.5 million, of which R188.5 million went directly to Absa to settle its creditor claim. 

Metair ensured that AutoZone implemented a fit-for-purpose funding structure, renewed its customer focus, and aligned strategically with the Independent Aftermarket (IAM) sector.

“Operationally, we never doubted our fundamentals,” De Graaff said. “But what truly stood out was the human spirit. Our people didn’t leave. They stepped up. And thanks to transparent leadership and open communication, we’ve emerged stronger.”

De Graaff says AutoZone’s approach was underscored by the high visibility and accessibility of leadership, as well as full transparency and openness. 

“Stakeholder communications focused on ensuring everyone knew what was happening and what progress had been made, or not, according to the agreed plan.” 

The company’s executive team met weekly with senior managers across the business to explain what was happening throughout the process. 

De Graaff said supplier support was overwhelmingly positive, and customers are already responding to the improved offering. “The real success is seeing customers come back and new talent wanting to join our journey.”

AutoZone is now focused on growing its relevance by expanding its product offering, penetrating deeper into the IAM value chain, and exploring new markets across Africa.