| Friday 17 December 2021 Good morning Voornaam,
Labat Africa is never far from the action and the colourful company has been in the news recently with an offshore listing that has helped line up capital for a cannabis expansion. Perhaps the company was too busy to remember to prepare provisional financial statements, which are now late. Trustco is also in the naughty corner, although that company has made it quite clear that it is tired of the JSE. In both cases, the listings may be suspended if the reports are not submitted by 31 December. Merry Christmas to both sets of finance teams.
Tongaat is another name that has been in the news for all kinds of reasons recently, most of which are bad. The company needs to raise equity capital (R4 billion of it) because the banking wolves are at the door. The circular for this capital raise has been made available. As a reminder, Magister has committed up to R2 billion to underwrite this capital raise; a supreme example of an opportunistic investor running into a burning building.
Steinhoff jumped 22.6% on the news that it has settled the claims by the former Tekkie Town owner. I'm now 40% up in my Steinhoff position, although I've been severely in the red at times as well. The liquidation application brought by the sellers of Tekkie Town (who lost a fortune because of Steinhoff's financial smoke and mirrors) was a significant risk that threatened the ongoing existence of the group. Braam van Huyssteen and his associates will receive R500 million in cash and 29.5 million Pepkor shares, a settlement worth more than R1.1 billion.
Another thriller has been Ascendis Health, which I like to call Descendis in one of those "you can laugh or cry about it" situations. Be sure to read my feature article today on the latest news from that circus.
Moving on to much better companies, MTN Group has made some important internal executive appointments and is restructuring its reporting lines into three divisions: South Africa, Nigeria and Markets (which would comprise the operations across the rest of Africa). Ralph Mupita is doing a fabulous job at the helm of MTN, which has seen its share price increase over 180% this year.
The Standard Bank - Liberty deal is making decent progress, with approvals obtained from key regulators: the SARB, the Financial Sector Conduct Authority and the Competition Tribunal.
Alexander Forbes is in the process of acquiring EBS International, a related party transaction under JSE rules as African Rainbow Capital is the seller of 25% of EBS and holds 39. 9% in Alexander Forbes. In such a case, a fairness opinion by an independent expert is needed. Alexander Forbes has announced that Moore Advisory has opined that the transaction is fair to shareholders.
enX Group is selling its South African materials handling business and expects to receive R677 million for the deal. It is considering a payout of R272 million to shareholders, a special dividend of R1.50 per share. A circular to approve the transaction has been made available to shareholders.
UK-based property fund Hammerson has exchanged or sold six non-core assets for total cash proceeds of GBP92 million since the end of its interim period. Including the first six months of the year, proceeds of GBP495 million have been generated.
Australian property fund Irongate has received yet another acquisition proposal from 360 Capital, a potential suitor that just can't handle the ongoing reject ion by the board and thus keeps buying flowers. The offer price is now AUD1.72 per stapled security, which is 7.2% higher than the last offer that the Irongate board said no to. The board is considering this revised offer and the share price closed 4.2% higher on Wednesday.
Tragically, Wednesday gave us a strong reminder of the dangers in the mining industry. A Harmony employee was fatally injured after losing control of a heavy vehicle. Sibanye released a particularly shocking announcement noting five fatalities in a single week. I've written on that tragic news (and the associated operational update) here.
Today's other feature article is on Capitec, which released a trading statement and an update on a proposed B-BBEE transaction.
For those working today, enjoy a quiet day in the office. For the rest of you, make the most of your leave and keep an eye on your trades!
The Finance Ghost
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