Like many treasury professionals, Shakira Pillay, Group Treasury Manager at South African automotive group Motus Holdings, started her career elsewhere in finance and pivoted towards treasury when the opportunity presented itself.
Pillay is a qualified chartered accountant (CA) by profession. She joined RSM as a trainee accountant in 2005 and went down the “old-fashioned route” of auditing. Following a secondment in the US, Pillay returned home in 2009 and took up a role in corporate reporting for Imperial Holdings, a multinational industrial services and retail group, where she stayed for almost a decade.
In mid-2018, Imperial unbundled its logistics business (Imperial Logistics) from its automotive business (Motus Holdings), which gave Pillay a chance to change roles.
“I wanted to do something different and get more involved in operations, as I no longer felt challenged in reporting,” she says. “However, at that time I didn’t intend to move into treasury.”
Following the demerger, Motus listed on the Johannesburg Stock Exchange (JSE) in November 2018. Today, 65% of its operations are based in South Africa, while its international businesses are based mainly in the UK, Australia and South-East Asia.
A few weeks before moving to the newly listed company, Pillay was asked to join the treasury team to help set up the function from scratch. Her decade-long working relationship with the incoming treasurer, Russell Mumford, meant that she trusted him to take a leap of faith.
A blank canvas
The original two-person treasury team’s main job was to look after bank financing and legal requirements for Motus. The company’s cash management activities were outsourced to an external provider.
Just over a year later, the team had arranged Motus’s debut international revolving credit facility (RCF). The company secured a £120m three-year RCF with a consortium of seven banks in January 2020, which was a sustainability-linked loan (SLL) aimed at reducing the company’s fuel and water consumption.
“It was a steep learning curve for me, as I had to work with lawyers and bankers to ensure everything was in place. But it was also exciting and challenging, which is what I wanted and why I decided to stay in treasury,” says Pillay. She remarks on the wide variety in the day-to-day work. “No day in treasury is the same, which means that every day I’m learning something new,” she adds.
As Motus treasury has a multi-bank structure, Pillay had to learn to navigate the different structures of each bank and adapt to their ways of working. She is also learning how to manage cash and working capital requirements, as well as getting into the weeds of the different businesses’ operations.
According to Pillay, she has had to change her mindset to work in treasury. She explains: “As an accountant, I used to analyse the results of past events, but now I am helping to shape what the results will be. Instead of thinking like an accountant, I need to think like an operations person.” In addition, her skill set has continued to expand, particularly following the group’s decision to bring cash management in-house. The size of the team was doubled and two new treasury analysts were hired.
On a daily basis, Pillay is mainly focused on the domestic operations’ cash requirements, where most of the funding is required, but she also has some involvement in the international businesses. She is directly engaged with debt refinancing discussions. “It is challenging to go through the refinancing process with the bankers and lawyers to ensure both sides are in agreement,” she says. She is also part of the asset-liability committee and compiles the quarterly company reports.
Motus’s funding is multi-faceted, including bank funding, asset-based floor plan financing, letters of credit (LC) and credit lines. For example, as an importer in the automotive sector, it uses LC funding for shipments. The retail businesses, on the other hand, use floor plan funding from the original equipment manufacturer (OEM). The car rental businesses also have floor plan funding. For its fleet businesses, Motus uses asset-based funding.
While supply chain finance is not currently a large source of funding for Motus, the group is beginning to look into it for the China businesses. “We are exploring if there’s a need but, thus far, there isn’t a driver to indicate that it’s something worthwhile for us to pursue,” Pillay says.
Banking relationships
While Motus has been multi-banked since the demerger, it has expanded the number of banks over the past six years. From a domestic perspective, the company engaged mainly with three large South African banks at the outset, but has since developed strong relationships with small and medium-sized institutions as their interest in Motus grew.
“Domestic banks have seen the value we’ve generated following the unbundling,” Pillay says. “They see the company as good credit and, therefore, are interested in investing in Motus.”
Building robust relationships has meant that the South African institutions have been willing to be part of international syndicates, which was not the case at the time of the inaugural international RCF in 2020.
Motus has also cultivated banking relationships internationally to support its operations abroad. In July 2024, for example, it secured a £150m refinance of its multi-currency facility collectively with South African and international banks for its international businesses.
Its major bank in the UK is Barclays, which has been “very supportive” in recent years, according to Pillay. “Barclays likes to get involved with the international funding, but also wants to be involved in-country,” she says.
However, establishing and maintaining strong international relationships has been negatively impacted by forces outside treasury’s control. While Motus had many foreign banks showing interest when it listed on the JSE, the Covid-19 pandemic followed by the greylisting of South Africa by global financial crime watchdog Financial Action Task Force in February 2023 – and the country’s subsequent downgrade – saw several foreign banks exit the country.
Importantly, other international institutions have stepped in after Motus launched ancillary businesses in their home countries. “While some banks exited because of the country view, others have stayed and have offered more as evidenced in our international refinance,” says Pillay. “These banks see Motus as being good quality credit, with a stable management team, so they have given us a lot of support.”
The Covid effect
As a diversified (non-manufacturing) business in the automotive sector, Motus has been able to generate cash. Even when it was part of Imperial, the automotive business was the cash-generating engine, supporting the logistics business, according to Pillay.
However, not long after Motus’s RCF, South Africa went into a ‘hard lockdown’ in late March 2020 due to the Covid-19 pandemic. “We couldn’t sell cars, which is our main business, but of course there were still costs to pay. It was very stressful for all companies in the country because of the uncertainty around when they were going to get cash in and what the banks would do,” explains Pillay. “So, we held many meetings with our banks to ensure they would support us – which, fortunately for us, they did and even extended the support that was needed.” Knowing that the South African banks were supportive allowed her to sleep at night during the pandemic, she adds.
The global pandemic had a significant impact on the automotive sector and its supply chain, particularly importers and OEMs. First, there was a semiconductor chip shortage, so vehicles couldn’t be produced. The shipments were on back order and then suddenly arrived, which created a challenge as to where to park the vehicles and how to move the stock, according to Pillay.
As Covid-related pressures began to ease, South Africa’s monetary policymakers started raising rates in November 2021, which impacted consumer demand. “Customers’ wallets were squeezed and credit applications weren’t going through, which stopped the cars from flying off the lot like they used to and left us with a lot of stock,” she says.
While stock are still moving slower than pre-pandemic, Pillay reports rising positivity in the past couple of months as interest rates started to come down. In addition, South Africans are now able to access a portion of their retirement savings under the newly implemented two-pot retirement system, effective as of September 2024.
“We have seen vehicle sales pick up in the past month or so, which has been good for us and we hope that will continue,” she says. “However, market sentiment indicates that interest rates will stay higher for longer, so we’ll see how that plays out. In addition, the influx of cheaper Chinese car brands coming into the country is an emerging challenge.” Motus sells Chinese brands in its retail business, but doesn’t import them.
Cash concentration
The fallout from the pandemic also revealed inefficient cash management in the international operations resulting in the uneven distribution of cash within Motus, with some businesses being cash poor while others sit on idle cash. “The impact of Covid highlighted the need to bring everything together, so we could use cash more efficiently,” says Pillay. “We initiated discussions with our banks to look at how best to do cross-border cash management.”
Following these discussions, Motus set up an innovative London-based cash pool with J.P. Morgan, for which it won Best in Class Treasury Solution in Africa at the 2023 Adam Smith Awards. It was one of the first South African corporates to create such a structure because of the stringent local exchange control regulations put in place by the South African Reserve Bank (SARB). In addition, setting up a cash pool required the central bank’s approval.
The solution included Motus using its domestic treasury management company (DTMC), which serves as a holding company for foreign assets. SARB allows Motus’s DTMC to move currency outside of the country up to a limit without seeking approval each time. “We use the DTMC in the cash pool, which also includes the UK businesses for the moment, as well as a small business in Africa. These businesses deposit their cash into the pool, so we can use it across the group as required,” Pillay explains.
However, implementing the cash pool was difficult at the start because many businesses didn’t want to lose control over their cash. “It took time and effort to make them comfortable with centralising cash, but we managed to get them over the line by showing the advantages from an interest perspective,” she says. “Today, there is more willingness to send cash up to head office to manage it for them.”
The team uses a treasury management system (TMS), which has a cash forecasting model to manage the daily funding requirements for the domestic businesses. However, like many other treasuries, the team doesn’t use all the functions available in the TMS. “In this age, treasury teams are still grappling with going digital. Most are more comfortable using Excel spreadsheets – we still use them on a day-to-day basis,” Pillay admits. However, she is working on making treasury processes more efficient and eliminating repetitive work, which includes using the TMS as efficiently as possible, as well as removing paper from processes.
Motus uses an outsource provider for its TMS and pays a license fee. As such, the treasury team is not fully engaged in developing the system. However, Pillay says that the current provider has young teams who are interested in introducing AI technology and robotic process automation. The South African banks have also invested in going digital, Pillay reports. “There has been much improvement in their capabilities, but there’s still a lot more that can be done,” she says.
She is engaging with the banks to explore how they can better distribute information to Motus. “We are getting banks to send us information via a robot or application programming interface,” she explains. “On most days it works wonderfully, but some days there are glitches and then people start losing hope.”
Career challenge
Recently, Pillay has been focused on completing her Association of Corporate Treasurers (ACT) qualifications. Although she receives exemptions as a CA, she decided to take the long route because she was new to treasury. She has completed the module needed for the certificate, as well as two modules for the diploma. “The challenge was to be disciplined in studying after a long time, but I managed it,” she says. “I found the ACT’s curriculum to be both practical and relevant. It’s given me a different outlook on treasury and helped to change my mindset. I now walk around and evaluate how the business operates.”
Another challenge she has faced in the past five years has been the difficulty, particularly in South Africa, to find individuals interested in treasury, she reports, as it’s not as accessible as other careers. “South Africa needs to take treasury a bit more seriously,” she says. “Treasury is considered a real career in other countries, but we haven’t yet reached that level of maturity here.”
Diversity in treasury is also an issue in the country. While there is some efforts to move women into more senior corporate roles, Pillay believes that treasury is not being promoted as a career for women. Instead, the preferred route for most is going into finance and becoming a CFO.
In 2025, Pillay is looking forward to achieving the ACT diploma. She also wants to move from performing daily cash management activities to more strategic elements of the business. “The next step in my career journey is to be more involved in the strategic planning, funding structures and sources, effectively putting into practice the knowledge that I’ve gained from the ACT courses,” she says. “It’s exciting to learn and read the case studies, but it is a different thing to actually do it. Funding structures is exciting, interesting, challenging and potentially quite stressful, but this is what I want to explore this year.”
