Blackstar, an investment company focused on South Africa, has acquired a further 25.47 per cent shareholding in Kulungile Metals Group (KMG) for ZAR50 million (£3.45 million) in cash.

Blackstar, an investment company focused on South Africa, has acquired a further 25.47 per cent shareholding in Kulungile Metals Group (KMG), a processor, distributor and stockist of carbon steel, stainless steel and aluminium, for ZAR50 million (£3.45 million) in cash.

Blackstar initially invested in KMG in June 2007 and the latest deal will bring its shareholding in KMG to 72.98 per cent with a total investment of £22.6 million, in the form of equity, preference shares and shareholder loans.

KMG services the engineering, mining, building fabricators and component manufacturers to the automotive industry.

For the six months to 31 August 2008, KMG’s unaudited pre-tax profit was ZAR118 million on turnover of ZAR1.4 billion.

Andrew Bonamour, director of Blackstar, said: “We expect that KMG will continue to benefit in 2009 from robust steel volumes as the South African government continues its infrastructure spending. KMG has a strong management team and the structure of our investment should contribute good cash flow to Blackstar.”