Metro Performance Glass Targets $15M-$24M Raise, Amari to Hold 51% Stake

• Equity raise of $15M-$24M via rights issue and placement
• Amari Metals Australia to acquire 51% stake as majority shareholder
• Existing bank syndicate agrees to $10M debt forgiveness contingent on raise
• New three-year debt facility secured with supportive covenants
• Turnaround strategy focused on operational efficiency and market repositioning

Metro’s Financial Reset

Metro Performance Glass (Metro), a leading Australasian producer of double-glazed glass units, has announced a significant recapitalisation plan aimed at stabilising its financial position and supporting its ongoing turnaround. The company is seeking to raise between NZD 15 million and 24 million through a renounceable rights issue and a placement to Amari Metals Australia Pty Ltd, which will become the new majority shareholder with a 51% stake.

This capital injection is designed to substantially reduce Metro’s net debt, which stood at NZD 60.5 million as of March 2025. The existing banking syndicate has agreed to forgive NZD 10 million of debt, conditional on the successful completion of the equity raise. Following the recapitalisation, Metro forecasts net debt to fall to between NZD 27 million and 37 million by March 2026, improving leverage ratios and providing a more sustainable financial platform.

Strategic Turnaround and Market Context

Metro’s turnaround strategy, particularly focused on its New Zealand operations, has involved significant changes to its board and management, product offerings, cost base, and employee culture. Despite subdued market activity in both New Zealand and Australia, the company is forecasting a return to profitability with a pre-IFRS 16 EBITDA of NZD 15.4 million in FY26 and NZD 21.4 million in FY27.

Regulatory changes mandating higher insulation standards in residential construction across Australasia are expected to underpin demand for Metro’s products, especially double-glazed glass units. While building activity remains subdued, these legislative shifts provide a structural tailwind for growth once market conditions improve.

Role of Amari Metals and Shareholder Implications

Amari Metals Australia, a strategic investor with extensive experience in metals distribution and business transformation, will become Metro’s majority shareholder through the placement. Amari’s involvement is expected to bring long-term stability and operational expertise, with a representative appointed to Metro’s board.

Shareholders will face dilution due to the substantial new share issuance, and shareholder approval is required under New Zealand’s Takeovers Code and NZX Listing Rules. The company has secured binding commitments from wholesale investors and directors to support the rights issue, ensuring the minimum raise is achievable.

Debt Facility and Financial Outlook

Alongside the equity raise, Metro has negotiated a new three-year debt facility with existing lenders, featuring covenants that provide headroom for the company’s turnaround initiatives. This facility replaces the current one expiring in September 2025 and is contingent on the recapitalisation’s success.

Metro’s FY26 budget assumes no general market recovery but anticipates improved profitability driven by operational efficiencies and cost reductions implemented in FY25. The company expects to generate positive operating cash flow and continue reducing debt in FY27.

Risks and Market Challenges

Metro acknowledges several risks, including intense competition, cyclical construction activity, operational dependencies on key manufacturing equipment, and potential conflicts arising from Amari’s related businesses. Regulatory changes remain a situation with both benefits and drawbacks, offering growth opportunities but also exposing Metro to risks if building codes shift unfavourably or overseas products gain easier market access.

The success of the recapitalisation and turnaround strategy hinges on shareholder approval and effective execution amid ongoing market volatility.

Bottom Line?

Metro’s recapitalisation marks a pivotal step toward financial stability and operational renewal, but execution risks and market uncertainties remain key watchpoints.

Questions in the middle?

• Will shareholders approve the recapitalisation and director participation in the equity raise?
• How will Amari’s majority ownership influence Metro’s strategic direction and customer relationships?
• Can Metro sustain profitability improvements if market conditions remain subdued or worsen?