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African Rainbow Minerals acquires the other half of Nkomati Mine (JSE: ARI)
The mine has been on care and maintenance since 2021
African Rainbow Minerals currently has a 50% stake in the Nkomati Mine. This mine has a nickel sulphide orebody and established infrastructure, having been placed on care and maintenance in March 2021. It can quite quickly be put back into steady state production of class one compatible nickel sulphide concentrate, which is what battery manufacturers are looking for.
It also has other bi-metal products like copper, cobalt, platinum, palladium and chrome.
African Rainbow Minerals clearly likes the outlook here, which is why the company is buying the other 50% in the asset held by Norilsk Nickel Africa. The purchase price for the equity is just R1 million, but don’t let that fool you. There’s a much more complicated transaction in the background about environmental liabilities and other mine liabilities.
The transaction is expected to close during 2024.
Earnings at Crookes Brothers go bananas (JSE: CKS)
Is there anything more volatile than primary agriculture?
If you want a nice, steady investment that won’t cause you much stress, then stay right away from primary agriculture. Despite what certain political parties will tell you, farming isn’t a guaranteed road to riches.
The latest trading statement is proof of this. Crookes Brothers had a terrible time last year, but things look much better now. Headline earnings per share for the six months to September has come in at 321.2 cents, which is a whole lot better than a loss of 193.7 cents in the comparable period.
This massive improvement is mainly thanks to the sugar cane and banana operations, along with a drop in fertiliser and other agricultural input costs. The fertiliser price has been a headache for several other listed companies on the local market that play in that space.
You’ll struggle to trade Deutsche Konsum, but you can learn from it (JSE: DKR)
And the lesson is that European property doesn’t like higher interest rates
Deutsche Konsum is one of the most pointless listings on the JSE. This thing never trades. Despite this, they need to meet all the reporting requirements of the JSE, like releasing financial results.
Still, elements of the financials are interesting and potentially applicable to other companies that you might be looking at. Before we get into that, you need to know that Deutsche Konsum is a specialist REIT focused on German retail properties. In other words, don’t take these insights and try apply them to Poland.
Countries with historically low interest rates don’t like it when rates move higher. It does ugly things to property valuations, like the portfolio value dropping by 9% year-on-year. The devaluation of the properties and an impairment of loan receivables has moved the loan-to-value ratio from 49.7% to 60%. That’s not what anyone wants to see. In other bad news, funds from operations fell by 11.5%.
The company is currently in a fight about REIT status and hasn’t declared a dividend for this year.
Long story short: in any country in the world, property funds can get into trouble.
Little Bites:
Director dealings:
An executive director of Richemont (JSE: CFR) has bought warrants with a value of R335 million. The announcements never name the directors (in true Swiss style), but I’m sure we can guess who is doing derivative trades with that kind of underlying value. In a separate announcement, a director executed warrants to buy shares worth R7.7 million.
Pay attention to this one: an associate of the CEO of Southern Sun (JSE: SSU) has bought shares worth R4.8 million.
An executive of Mondi (JSE: MNP) received shares under a long-term incentive scheme and couldn’t sell them quickly enough, selling the whole lot for a total value of £160k.
I always treat purchases by Value Capital Partners with caution, as this is an institutional investor that has board representation, so this is more of an institutional purchase that comes through as director dealings. The quantum maybe isn’t comparable to other director purchases, but the direction of travel is useful. With that out the way, the news is that Value Capital Partners has bought nearly R2.8 million worth of shares in Altron (JSE: AEL).
A director of Kumba Iron Ore (JSE: KIO) has sold shares worth R1.77 million.
The company secretary of Nedbank (JSE: NED) has sold shares worth R181k.
The company secretary of Datatec (JSE: DTC) has sold shares worth R62.4k.
The rules around the release of trading statements are designed to give shareholders an early warning when financial results will differ significantly from the comparable period. In the case of a mess like Efora Energy (JSE: EEL) that is suspended from trading, I’m not sure that the rule should apply. Case in point: a daft situation where the company has released a trading statement for the six months ended August 2021!
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Covid didn’t kill this radio star (JSE: AME)
African Media Entertainment is bouncing back strongly
Although we were all forced to stay home and stay safe during the pandemic, it actually wasn’t a good time for radio stations. Many of the smaller stations are dependent on being part of the events ecosystem of their hometowns. During the pandemic, there were no events to be part of!
Things have thankfully improved tremendously for African Media Entertainment, with the six months to September reflecting revenue growth of 11% and operating profit growth of 34%. Headline earnings is up 27%. Even better, HEPS is up 39% to 207.3 cents.
Despite all this, the dividend is flat at 100 cents per share.
I always pay attention to the commentary around Moneyweb for obvious reasons. Digital and radio revenue is higher than the previous year, with that business looking at alternative business strategies to achieve revenue growth.
It’s worth highlighting that the company also has an indirect economic interest of 29.9% in Kaya FM, achieved through a 100% economic interest in Mokgosi Holdings.
City Lodge shows signs of life in its pricing (JSE: CLH)
The food and beverage strategy also continues to pay off
Earlier this week, I wrote about Southern Sun and how I prefer the leisure-style offering to a more business-focused offering, while also acknowledging the solid job done by City Lodge in pivoting the business in response to consumer changes.
A voluntary operating update by City Lodge shows that those management interventions are starting to really bear fruit. The comment that surprised me is a note that both leisure AND corporate travel have recovered to pre-Covid levels. The three months to September 2023 saw occupancies rise to 62%.
Now, occupancy is one thing, but pricing is quite another. It’s easy to fill rooms at a low price, which has been the issue plaguing City Lodge in the post-pandemic recovery. It’s good to see that average room rates in South Africa are 9% above the prior comparative period, after increasing 12% in FY23.
I like the 44% increase in food and beverage revenue for the quarter. I also like the net cash position, with R100 million in the bank and R70 million in debt. There are substantial undrawn facilities. The balance sheet is important, as there is significant reinvestment needed in the hotels, particularly after the pain of the pandemic and deferred projects.
Importantly, the group generates 16.3% of its energy requirements from solar renewable energy. And, not to scare you, but a water resilience strategy is a key focus area!
Unsurprisingly, the market liked this update.
Delta Property Fund sells a Port Elizabeth property (JSE: DLT)
This makes a very, very small dent in the debt
Delta has agreed to sell a property in Port Elizabeth known as Cape Road for R33 million. It has a 69.3% vacancy rate and was last valued at R36.6 million. Despite the vacancy rate, it was generating an operating income of just over R1 million.
Delta is trying to sell assets to reduce its loan-to-value ratio. This sale barely touches sides, with the loan-to-value down by 20 basis points from 61.4% to 61.2%. Vacancy levels will decrease by 20 basis points from 32.9% to 32.7%.
Transfer will hopefully be completed by March 2024.
Frontier Transport Holdings is a lesson in cost control (JSE: FTH)
Here’s a perfect example of how modest revenue growth can do big things
Frontier Transport is one of those companies that never seems to be on the radar for retail investors. Operating a bus service isn’t exactly a swashbuckling way to make money, yet here we are with Frontier reporting a jump in EBITDA of 42.6%. Most impressively, that’s been achieved off revenue growth of 6.9%.
How, I hear you ask? Expenses only increased by 1.1%, which really is an impressive outcome. Once you factor in net finance income and profit from the N2 Express service (which is equity accounted), there’s a 62.9% increase in attributable profit.
Perhaps the most important thing about Frontier is the role it plays in the transport infrastructure. The reality of the situation is that this is the only viable alternative to taxis in the broader Cape Town region. On top of that, Frontier has businesses that play in adjacent transport verticals like luxury coach tours.
Notably, the increase in the dividend has been far more modest than the 64% increase in HEPS. The dividend is up by only 10% to 24.2 cents.
KAL Group shows excellent cost control (JSE: KAL)
Like-for-like growth is hard to come by, though
This period saw the inclusion of a full year of performance at PEG Retail Holdings (the fuel business) being included in KAL Group’s results. In the prior period, it was only included for three months. This obviously limits comparability.
Instead of looking at revenue growth of 42.7%, I would focus on like-for-like growth of just 5%, which shows that things aren’t easy out there in the agri space. I did find it impressive that gross profit is up 45.7%, reflecting higher gross margin despite the lower margin fuel revenue playing such a role. This talks to improved margins within the retail business.
The real win is like-for-like expenses falling by 2.1%. They also calculate this metric excluding load shedding, in which case it fell 3.7%. That’s really impressive.
Headline earnings increased by 20.7% and recurring headline earnings grew by 14.7%. HEPS was only up by 11.1% though and the dividend for the full year was 7.1% higher. The difference between headline earnings growth and HEPS growth isn’t because of a change in the number of shares. It’s actually because of a large increase in non-controlling interest year-on-year. HEPS is calculated based on headline earnings attributable to ordinary shareholders of KAL Group.
Overall, KAL Group has done well, but the announcement sets out the many challenges being faced in the agri environment. The PEG fuel business is doing well, with the company showing a mature approach by disinvesting from four underperforming sites that don’t meet return on invested capital requirements.
The market liked it, with the share price closing 5.9% higher.
Mahube Infrastructure: powered by the sun and the wind (JSE: MHB)
A trading statement drove a jump in the share price – but watch the spread
Whenever you see a big jump in a small cap, make sure you check the intraday chart to see whether there were various trades or just one. Here’s the intraday Mahube Infrastructure chart from Moneyweb:
As you can see, it’s not the most liquid chart around. When it looks more like a tetris piece than a worm, you need to tread very carefully. The best bid is R4.03 and the best offer is R4.85.
This lack of liquidity is despite HEPS for the six months to August moving higher by between 56.6% and 73.1%, driven by higher dividends from the solar businesses in which Mahube is invested, as well as a positive fair value movement linked to the wind power plant investments. That move is based on an upward revision in long-term assumptions around the project.
I would give the dividend a lot more weight than the fair value moves.
Detailed results are due to be published on 30 November.
Read the Mr Price numbers very carefully (JSE: MRP)
This period was all about the inclusion of Studio 88 in the numbers
Whenever a group has executed a major acquisition, you need to be really careful with how you interpret the growth rates. Companies can literally buy growth in revenue etc. through acquisitions. That doesn’t tell you anything about how the rest of the group is performing.
For example, in the 26 weeks to 30 September, Mr Price’s revenue is up 26.4% including Studio 88 and just 3.5% without it. Comparable store sales fell 0.8% despite being in an inflationary environment, which means volumes were sharply negative.
There’s another nuance here. When a company makes acquisitions for cash, then headline earnings per share should be boosted by the acquisition, although funding costs can offset that benefit. When an acquisition has been paid for with shares, the rubber hits the road at headline earnings per share level, as there are more shares in issue. And of course, there’s still the core group business to consider and how it performed in the same year as the acquisition.
Mr Price paid for Studio 88 using existing cash resources, so one would expect to see a jump in HEPS because earnings have been bought for cash rather than shares. Instead, we see HEPS down by 9.3%. That’s a really poor outcome.
Reasons for this range from load shedding through to a highly promotional environment that hit gross margin. Mr Price also notes that Studio 88’s revenue is seasonal and weighted more towards H2. Another important point is that Studio 88 is a lower margin business than the rest of the group, contributing to a drop of 170 basis points in gross margin. If we exclude Studio 88, we see gross margin down 100 basis points for this period. It was a tale of two quarters, down 350 basis points in Q1 and up 190 basis points in Q2 as excess inventory was cleared.
Perhaps the gross margin trend is what the market liked about these results, as I can’t see much else to like. The fact that expenses excluding Studio 88 grew by 6.1% certainly doesn’t help.
Perhaps the market took some heart from the Apparel segment growing retail sales by 5.1% excluding Studio 88, although comparable sales only grew 0.5%, so that’s really clutching at straws. The Homeware segment saw sales drop 1% and comparable retail sales fall 5.5%, with the only real highlight being Yuppiechef with double digit growth because that business has strong market positioning. The rest of the players in this market are a dime a dozen, with ever-increasing levels of competition.
Another headwind is that Mr Price funded the deal using existing cash, so the net finance expense is up 88.3% to R336 million.
And on top of all this, there are huge issues at the ports that are likely to cause supply challenges over the festive season.
Despite all this, the market decided to put 10% on the Mr Price share price in morning trade. I’ve learnt enough hard lessons in the market not to ignore the price action. I just for the life of me cannot see the good news story here.
This year at Spar was not Good For You (JSE: SPP)
Hopefully, the worst is now behind them
Spar has released a trading statement for the year ended September 2023. Operating profit has fallen sharply from R3.4 billion to between R1.6 billion and R2.0 billion. Based on that, it’s little surprise that HEPS is down by between -53% and -43%. That’s an expected range of 545.4 cents to 661.5 cents, with the share price at R113 in morning trade.
Aside from the obvious competitive challenges and the state of the South African consumer, there was a disastrous SAP project at the KZN distribution centre. Spar reckons this had an impact of R720 million in lost profits.
Earnings per share is down by between -86% and -76%, with the bigger hit vs. HEPS coming from various impairments, including in the international operations.
And in addition to the operating profit pressures, there was an increase of R433 million in net finance costs due to higher interest rates. The group highlights that financiers are supportive of the group and have agreed to amendments to banking covenants.
When a company makes a comment like this, you know it’s been rough: “At this stage, the Group does not intend to raise any capital from Shareholders.”
Trematon is returning capital to shareholders (JSE: TMT)
The company is frustrated with the realities of being listed
Trematon makes it quite clear in its results for the year ended August that structural issues in the local market mean that investors in JSE-listed investment holding companies will find it difficult to exit at full value. In other words, the discount to intrinsic net asset value (NAV) is an unavoidable problem.
There’s a strong element of truth in this, although most investment holding companies on the JSE have brought these problems upon themselves with high management fees and mediocre performance. Trematon wants to get to the point where all the portfolio companies are self-funding, at which point the annuity income will either improve the market rating or the company will look at other ways to return value to shareholders.
Trematon’s intrinsic NAV is 439 cents and the share price is R3.00. I’ve seen far worse in the way of discounts on the local market. Generation Education and Aria Property Group make up 63% of the group’s intrinsic NAV.
For those interested in the Generation business, operating profit increased from R9.5 million to R17.1 million and the group has acquired a new school in Modderfontein, Gauteng. Despite this, the value of Generation in the intrinsic NAV has fallen based on a more conservative approach to revenue forecasts in the discounted cash flow model.
Unfortunately, much as Trematon may bemoan the structural issues on the JSE, the reality is that intrinsic NAV has fallen from 487 cents to 439 cents. It’s tough out there and investors know it. Here’s the breakdown:
In an effort to try narrow the gap, a capital distribution of 32 cents has been declared, down from 40 cents in the prior year.
Little Bites:
Director dealings:
The CEO of MTN (JSE: MTN) has bought the dip in a big way, investing R8.8 million in shares in the company. MTN is now back above R100.
The CEO of Life Healthcare (JSE: LHC) has bought shares in the company worth R3.5 million.
The Mouton family has bought more shares in Curro (JSE: COH), this time to the value of nearly R3 million.
A director of a major subsidiary of Woolworths (JSE: WHL) sold shares worth R1.4 million.
An associate of a director of Sanlam (JSE: SLM) sold shares worth over R900k.
Various directors of Richemont (JSE: CFR) have bought shares worth over R580k.
A prescribed officer of Barloworld (JSE: BAW) bought shares worth nearly R500k.
An associate of a director has disposed of shares in Wesizwe Platinum (JSE: WEZ) for R132k.
Mantengu Mining (JSE: MTU) released a trading statement for the six months to August. It reflects a headline loss per share of between 9.5 cents and 10.5 cents, which is worse than the headline loss of 5 cents per share in the comparable period.
There is yet another delay in the publication of the Tongaat (JSE: TON) amended business plan. It’s been pushed out by a week to a publication date of 29 November and a meeting date of 8 December.
There’s also an extension for the fulfilment of suspensive conditions for Conduit Capital’s (JSE: CND) disposal of CRIH and CLL. The date has been pushed out to 31 January 2024.
2023 has seen global capital markets dwindle, with higher borrowing costs and lower valuations leading to more frugal investments. For African countries, market size and liquidity have always been an issue, made even more so by the current challenging global conditions. Activity in these markets is few and far between (SA excluded), so the Latin saying, “fortune favours the brave” indeed applies to these three companies – Airtel Africa, Beltone Financial Holding and Oryx Properties – who defied market conditions, announcing an IPO and listing and capital raises respectively, during H2 2023.
Beltone – one of the fastest-growing investment banks in Egypt – successfully completed the issue and listing of 5 billion shares, raising EGP10 billion (c.US$323 million). The capital raise marked the largest in the history of the Egyptian Stock Exchange, with the second round of the rights issue oversubscribed by 5.49 times. Namibia’s largest property fund, Oryx Properties, raised N$312.85 million ($17,2 million) with unit holders subscribing for a total of 26,947,033 (82.4%) linked units. Airtel Africa, a provider of telecoms and mobile money services, undertook an IPO and listing of its Ugandan subsidiary on the USE. While disappointing – as the offer received only a 54.45% subscription rate – the company listed 4,36 billion shares, attracting some 4,600 investors and raising Shs211 billion (c.$56 million).
The JSE, Africa’s largest stock exchange, comparatively has an active ECM market; however, it is not immune to difficulties. In a move to ease the challenges faced by companies seeking to raise capital in South Africa, a new fintech company, Utshalo has just been launched to address the challenge.
The African M&A environment has faced similar challenges, such as economic and political instability, market fragmentation and limited availability of target companies, currency and exchange rate risks, and infrastructure constraints. The value of deal activity, as captured by DealMakers, for the 2023 year to end-September was 49% down, at $7,9 billion off 363 deals, when compared with 2022’s figure of $15 billion (522 deals) over the same period. Deal activity was highest in East Africa (110 deals), more specifically, Kenya (71 deals), followed by Nigeria (62 deals) and Egypt (47 deals).
According to the DealMakers’ private equity analysis, in cumulative terms, the value of deals in Africa (excluding South Africa) was $1,3 billion for the year to end-September 2023, a quarter of that recorded in the same period in 2022 ($4,1 billion) and $1 billion down on the value reported in 2021.
Of the top 10 deals for the period, six involved targets in the energy and resources sector. The largest deal by value remains the acquisition by China Natural Resources of Williams Minerals in Zimbabwe, announced in February 2023, with a deal value of $1,75 billion.
On a positive note, the slow growth in sub-Saharan Africa is expected to rebound in 2024 as tough financial conditions ease, inflation continues to come down, and as the global economy rebounds.
PPC’s wholly-owned subsidiary PPC International is to dispose of its 51% stake in CIMERWA (Rwanda) for US$42,5 million. CIMERWA, which is listed on the Rwanda Stock Exchange, will be purchased by a privately-owned company, National Cement Holdings, which is part of the Devki group, one of the largest manufacturers of clinker and cement in East Africa.
Burstone Group (formerly Investec Property Fund) has, via its newly formed Australian joint venture with Irongate Group, acquired its first industrial property in New South Wales, Australia for A$57,25 million. The Irongate joint venture will provide the 20% co-investment equity, alongside APAC-focused private equity real estate investment group Phoenix Property Investors (80%), and the fund management capabilities for the deal.
Delta Property Fund has entered into an agreement with Slip Knot Investments to dispose of a property at the corner of CJ Langenhoven Drive and Cape Road in Gqeberha for R33 million. The disposal is part of Delta’s ongoing strategy to dispose of non-strategic assets. The proceeds will be used to reduce debt and the Loan to Value (LTV) by 0.2% from 61.4%.
Unlisted Companies
Payments24, a South African global payments platform provider specialising in payment and loyalty solutions in the digital and fuel payment ecosystem, has invested in Inergy 24, a Swiss-headquartered European-based technology service provider. The two businesses collectively will provide customers throughout Europe access to the Pay24 platform including fleet management, loyalty and rewards, mobile, retail and electric vehicle payments and Cloud Switch solutions.
24 Bit Games, a Unity focused technical game development studio based in Johannesburg, has been acquired by Annapurna, an American video game publisher and developer. The companies have worked together for many years and this next chapter will enable 24 Bit Games to grow its development team and existing technology toolkits for its client base and future projects.
Kgodiso Development Fund, an independent fund founded by PepsiCo South Africa, has invested into agri-tech digital platform Khula! The platform enables small and medium-sized agricultural enterprises, commercial farmers and distributors to participate in the agricultural value chain. The undisclosed investment will be used by Khula! to develop innovative ways to sustainably finance emerging farmers.
The asset management firm Anchor Capital is to merge with London-based boutique wealth manager Credo. The combined entity will have assets under management of R230 billion with Anchor shareholders owning 80% of the combined entity.
Springs Car Wholesalers (SCW Group) has acquired the SANI Car Rental brand and will operate as franchisees under the brand in South Africa and Namibia. Financial details were undisclosed.
Sirius Real Estate has undertaken a non-pre-emptive placing of new ordinary shares to raise gross proceeds of £146,6 million. The company issued 170,417,384 new shares at an offer price of 86 pence, representing a discount of c. 5.9% to the closing price on 17 November 2023. The capital raise will provide the company with the flexibility to pursue attractive acquisition opportunities which, it says, exist in Germany and the UK.
African Rainbow Capital Investments will undertake, a fully committed and underwritten, pro rata non-renounceable Rights Offer of R750 million. The company will offer 150 million ordinary shares at R5.00 per rights offer share in the ratio of 11.06579 rights offer shares for every 100 existing ordinary shares held. The rights offer price represents a 7.3% discount to the 30-day VWAP price as at 10 November 2023. The funds raised will be used to meet the medium-term funding requirements of the ARC Fund. Shareholders holding an aggregate 65% stake in ARC Investments have committed to subscribe with the balance of the offer fully underwritten by ARC.
The results of Sable Exploration and Mining’s Rights Offer, which was first announced in February, was all but ignored by shareholders with an uptake of just 1.38% of the rights shares offered. Fortunately, the capital raise was fully underwritten by various parties with the company raising the R52,2 million sought.
Prosus and Naspers continued with their open-ended share repurchase programmes. During the period 13 – 17 November 2023, a further 5,793,624 Prosus shares were repurchased for an aggregate €174,97 million and a further 429,582 Naspers shares for a total consideration of R1,44 billion.
Following the announcement in October of its share buy-back programme, AB InBev has repurchased 1,570,232 shares at an average price of €56.26 per share for an aggregate €88,34 million. The shares were repurchased in the period 13 to 23 November 2023.
Glencore intends to complete its programme to repurchase the company’s ordinary shares on the open market for an aggregate value of US$1,2 billion by February 2024. This week the company repurchased a further 9,470,000 shares for a total consideration of £43,62 million.
WG Wearne will have its listing removed from the JSE from the commencement of business on 28 November 2023. The company’s listing was suspended in July 2018 for failure to submit its provisional report. Since its suspension, WG Wearne has failed to remedy the various non-compliances and did not appeal the removal decision by the JSE.
Steinhoff Investments, subject to shareholder approval, is proposing to change the company’s name to Ibex Investment Holdings to align with similar changes implemented through its holding structure. The company will remain listed in the ‘Preference Shares’ subsector of the main board of the JSE.
Four companies issued profit warnings this week: Stefanutti Stocks, Deneb Investments, The Spar Group and Mantengu Mining.
Three companies issued or withdrew a cautionary notice: Salungano, Telkom and Tongaat Hulett.
Nigerian Breweries has issued a circular to shareholders to approve the acquisition of an 80% stake in Distell Wines and Spirits Nigeria and 100% of Heineken Beverages (Holdings) import business in Nigeria for ₦7,01 billion. The deal follows the successful acquisition by Heineken of South Africa’s Distell Group.
Oriole Resources and Ghana-based BCM International have entered into two heads of terms (HoT) agreements to fast-track the development of the Bibemi and Mbe gold projects in Cameroon. The HoT for Bibemi is an earn-in of up to 50% by BCM for a US$500,000 cash payment and $4 million exploration expenditure, whilst the Mbe HoT is an earn-in of 50% for a cash payment of $1 million and $4 million exploration expenditure.
Ed Partners Africa, a Kenyan non-banking financial institution, has received commitment for a US$10 million loan guarantee facility from the United States’ Development Finance Corporation (DFC).
Nigerian online grocery store, Pricepally, has raised US$1,3 million in seed funding from Samurai Incubate, SOSV, ELEA, Hi2 Global, Chui Ventures and David Mureithi to expand within Nigeria.
Aquarech, a Kenyan fish farming startup founded in 2019, has raised US$1,7 million in equity funding to support small-scale farmers through its mobile app platform. Aqua-Spark led the investment and was joined by Acumen, Katapult and Mercy Corps ventures.
Nigerian fintech, FrontEdge, has raised US$10 million in a debt and equity round led by TLG Capital, which also included Flexport. FrontEdge provides SME exporters and importers with the working capital and software tools needed to facilitate their cross-border and international transactions.
Morocco’s B2B e-commerce and fintech startup Chari, has announced an undisclosed investment from Mohammed IV Polytechnic University’s investment fund, UM6P. This is the fourth investment announcement this year. In February, Orange Ventures invested US$1 million. In May, Plug and Play made an undisclosed follow-on investment and in June, Verod-Kepple Africa Ventures invested $1,5 million.
MMG Africa Ventures (Hong-Kong listed MMG Limited) has reached agreement with Cupric Canyon Capital, The Ferreira Family Trust, Resources Capital Fund VII and the Missouri Local Government Employees’ Retirement System to acquires all their shares in the target company that indirectly wholly owns the Khoemacau copper and silver mine in Botswana, for US$1,9 billion.
Egyptian sports equipment and apparel marketplace, WayUp Sports has raised an undisclosed seed round led by Beltone Venture Capital and Index Sports Fund. Other strategic angel investors also participated.
Africa Healthcare Network has raised US$20 million in debt and equity funding from Africa50, AfricInvest and Ohara Pharmaceuticals Co to accelerate its growth.
In a rapidly evolving digital world, corporate finance is witnessing the dawn of a transformative era, with artificial intelligence (AI) at the helm. No longer are decisions exclusively grounded in Excel analyses and instinct. Today, AI offers a fresh lens, redefining how we pinpoint corporate finance transactions and assess them within the context of shifting economic and geopolitical landscapes.
A Testimony to AI’s Growing Role
A recent EY study of 1,200 CEOs unveiled some interesting trends. CEOs overwhelmingly (65%) view AI as a force for good, attributing its potential to both enhance business efficiency and foster societal improvements, such as healthcare advancements. More than a quarter (27%) of respondents are already harnessing the power of AI in their mergers and acquisitions (M&A) processes.
However, this optimism is tempered by concerns. The majority of CEOs believe that more work is needed to mitigate the social, ethical and criminal challenges that AI might introduce, from cyber threats to the spread of deepfakes. Yet, despite these apprehensions, business leaders remain positive.
Ask the Right Questions: The Art of Prompt Engineering – The better the question, the better the answer, the better the world works.
While AI’s prowess in data analysis is widely celebrated, the essence of obtaining actionable insights lies in asking the right questions. This is where prompt engineering, our ability to articulate the question in a manner that is understandable to the AI model, becomes invaluable. By finely tuning our queries and prompts, we can guide AI systems to extract precise, valuable insights from heaps of data.
From Vast Data to Valuable Insights: AI in Action
The real-world applications of AI, particularly when paired with adept prompt engineering, are vast. Machine learning algorithms and natural language processing enable rapid identification of investment opportunities, risk assessments and market trend analysis.
Target Identification Consider an investment bank using AI to screen global news and financial reports. By engineering the right prompts, the system can not only flag potential merger candidates, but also assess how these targets align with larger strategic goals or macroeconomic indicators. Refinitiv, a global provider of financial market data, has developed a quantitative prediction of M&A targets by analysing text, patent and fundamental content.
AI can also be used to evaluate the cultural compatibility of merging entities. Salesforce’s acquisition of Slack is a great instance of aligning culture and product offerings. Tools like CultureX, an AI platform backed by MIT, provides insights into company culture using employee reviews on platforms like Glassdoor.
Due Diligence and Valuation AI expedites and enhances due diligence processes by rapidly analysing data sets, ensuring comprehensive risk identifi-cation and offering dynamic, real-time valuations of target companies. Tradition-ally, transaction professionals grappled with vast amounts of siloed data manually. EY’s “Diligence Edge”, powered by AI, is revolutionising this approach. By harnes-sing the capabilities of IBM Watson’s Knowledge Studio and Discovery, EY Diligence Edge offers a panoramic view of target companies and their competitors.
The AI-driven “smart data room”, within and powered by Watson, streamlines data ingestion and analysis, allowing profes-sionals to swiftly identify and analyse pertinent information. The final layer of this tech stack is its presentation capabilities, which allow findings to be showcased in intuitive, interactive dashboards.
Predictive Analytics and Financial Modelling AI models optimise capital allocation by predicting high-return investments and forecasting market trends, guiding financial decisions. BlackRock leverages Aladdin, an AI system, to analyse risks and make investment decisions. The platform provides an end-to-end picture of portfolios, assisting in capital allocation.
Real-time Monitoring
AI continuously monitors stock markets and other financial indicators, alerting businesses to potential acquisition targets or market shifts that align with predefined criteria. Goldman Sachs uses its Marcus platform, which incorporates AI, to continually monitor financial markets and offer real-time insights. Such platforms can be tailored to identify potential M&A targets based on predefined criteria and real-time market dynamics. Cisco, when it acquires companies, uses AI and machine learning tools to help integrate the acquired company’s products, technology and team, ensuring a smooth transition.
Regulatory & Contractual Oversight AI tools ensure compliance with evolving international business laws during cross-border M&A deals, and assist in analysing contracts for potential risks and obligations. EY uses Kira, an AI-powered contract analysis tool, to assist in identifying and extracting regulatory clauses and requirements from legal documents.
Risks to Consider: The Other Side of the AI Coin
The marriage of AI and prompt engineering in corporate finance promises efficiency, precision, depth of insight, and evolving accuracy. But as with all powerful tools, it must be wielded with care, understanding both its potential and its pitfalls.
As promising as AI is in reshaping corpor-ate finance, it is not without its challenges:
Data Quality AI models are only as good as the data fed into them. Inaccurate or biased data can lead to flawed insights, potentially causing significant financial repercussions.
Over-reliance An over-dependence on AI without human oversight can be risky. It is essential to strike a balance between automated insights and human judgement.
Security Concerns AI systems, like any digital platform, can be vulnerable to cyberattacks. Ensuring robust cybersecurity measures is paramount.
Ethical Implications From data privacy issues to the potential biases in AI algorithms, there are several ethical considerations to be addressed.
Regulatory Challenges As AI becomes more prevalent, regulatory bodies worldwide are grappling with creating frameworks to govern its use, which could impact its application in corporate finance.
Closing Thoughts
The potential of AI to reshape corporate finance is evident. As the tools become more sophisticated, so does the importance of crafting the right questions. In a domain where strategic decisions have monumental consequences, the synergy of AI and adept prompt engineering can be the much-needed ace up the corporate finance professional’s sleeve.
Brian Vaddan is an Associate Director in the EY Strategy and Transactions Team, focusing on Financial Modelling and Data Analytics.
This article first appeared in DealMakers, SA’s quarterly M&A publication.
Since gaining independence in 1963, Kenya has evolved to become a major economic force in East and Central Africa, so much so that it has been compared to Singapore’s extraordinary rise in Asia.
Like Kenya, in the 1960s, Singapore was a nascent state grappling with its newfound independence and the various challenges that it presented. But fast forward to today, and Singapore is a beacon of economic prosperity – its transition from a humble port city to a universally acclaimed financial nucleus is a compelling tale of transformation.
Singapore’s success story, underpinned by strategic positioning, stalwart legislation and a pro-business environment, offers a replicable model for burgeoning economies. It is in this proven blueprint that Kenya – with its robust policies; booming fintech, ICT and renewables sectors; young and capable workforce; and strategic geographic location – can find inspiration, and how it could well become Africa’s own version of Singapore.
FROM GOOD TO GREAT
Kenya’s thriving economic climate is testament to the strength of its 2010 Constitution, effective legislative frameworks and forward-looking regulatory policies – all contributing to a competitive business landscape that propels economic development.
According to the World Bank, Kenya’s economy achieved broad-based growth averaging 4.8% per year between 2015 and 2019, significantly reducing poverty from 36.5% in 2005 to 27.2% in 2019.
Real GDP is anticipated to rise to 5% in 2023 and 5.2% on average in 2024 and 2025. Moreover, the World Bank’s Ease of Doing Business index placed Kenya 56th out of 190 economies in 2020, a substantial climb from its 113th rank in 2013.
That said, there is room for improvement.
98% of all Kenyan businesses are small and medium enterprises (SMEs). Given that these SMEs provide livelihoods for the majority of Kenya’s working populace, any policy modification bolstering this sector’s growth promises profound economic dividends. For example, adjusting antitrust and competition regulations by tweaking the thresholds for compulsory reporting or approvals could reduce investment barriers and benefit smaller ventures.
The pursuit of inclusive growth is also key. While the country’s constitution advocates fairness and inclusivity, corruption is an issue. Transparency International’s 2022 Corruption Perceptions Index ranks Kenya at 123 out of 180 countries, which highlights the need to rein in corruption.
Kenya must also scrutinise its constitutional expenses. A rationalised approach to expenditure would contribute to fiscal prudence and further solidify the country’s economic health.
An evaluation of Kenya’s existing legal framework reveals the need to revise and update certain laws. By doing so, inconsistencies that pose potential hurdles to investors can be mitigated. This would involve investing in capacity building for legal and regulatory bodies. Strengthening these institutions is a key step towards ensuring the uniform resolution of complex legal issues and fostering consistency in decision-making. In addition, there is a real opportunity for Kenya to further the development of an independent and competent judiciary.
Although already on the path to digitise government services and registries, a sharp focus on completing the digitisation of lands and business related registries will increase efficiencies.
The role of public-private partnerships (PPPs) in infrastructure development is also pivotal. To reap the full benefits of PPPs, however, Kenya should revisit the current legal framework governing these partnerships. Simplifying processes and enabling swift project implementation would make PPPs more attractive, fuelling infrastructure growth.
On the human side, investment in education and vocational training is key. Kenya’s public universities need to offer modern and fit-for-purpose curricula. Vocational training in sectors such as healthcare, tourism and manufacturing will make the human capital in Kenya even more competitive, and attract more investment into the country.
Finally, a significant aspect of Kenya’s path forward involves reforming its complex and aggressive tax laws. A clear and equitable tax structure would expand the tax net, foster a conducive business environment, and amplify Kenya’s appeal to local and foreign investors.
LOOKING FORWARD
Kenya has positioned itself at the forefront of green growth in Africa. 93% of the country’s electricity generation capacity in 2020 hinged on renewable energy. However, like other developing nations, the financing of green initiatives presents a challenge that needs to be confronted.
Kenya’s blossoming technology industry also requires a supportive legislative environment. An astute ‘light-touch’ regulatory approach would enable industry growth while ensuring regulatory compliance.
The African Continental Free Trade Area (AfCFTA) offers the prospect of pan-African economic integration. To capitalise on this opportunity, Kenya needs to harmonise its national legislation with AfCFTA provisions. With approximately 40% of the East African Community’s GDP credited to it, as well as its experience fostering regional integration within the East African Community, Kenya is well positioned to shepherd the AfCFTA agenda.
Kenya’s quest for success hinges on steadfast action and unwavering commitment to economic competitiveness, inclusive growth, sustainability and regional integration. The challenges are daunting, but not insurmountable. The Government has demonstrated a readiness to confront these hurdles head-on, laying a robust foundation for the country’s future.
The road ahead for Kenya is illuminated with promise. With sustained efforts and strategic interventions, Kenya’s vision of replicating Singapore’s success story on African soil is within reach.
Paras Shah is the Managing Partner | Bowmans Kenya
This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication. DealMakers AFRICA is a quarterly M&A publication. www.dealmakersafrica.com
There are various complexities inherent in the sale and acquisition of businesses, which, if not properly managed, can often lead to missed opportunities on either the sell or the buy side.
Accordingly, the processes involved in the disposal of a business must be appropriately attended to, to ensure that the maximum potential value is realised.
One of the most important aspects of the disposal of a business is the accompanying due diligence that the acquirer must undertake. The due diligence process has multiple purposes, but is primarily focused on determining the inherent risks for the acquirer, which may impact the purchase consideration. Typically, the due diligence process is handled by creating virtual data rooms (DD rooms), where the seller provides the acquirer with relevant information about the business. However, key information is also often shared outside of the DD room, either in ad hoc email correspondence or desig-nated meetings. From the seller’s perspective, it is prudent to ensure that the ad hoc correspondence is transferred to the virtual data room. This can be done, for example, by ensuring that all the acquirer’s ad hoc questions are encapsulated in a single document, with the corresponding responses from the seller.
The DD room is also critical to the disclosures of the purchase agreement. To this end, the seller would want the DD room to be annexed to the disclosure clauses as part of the purchase agreement. This practice aims to prevent unnecessary warranty and indemnity claims for the seller as a result of non-disclosure. In such a case, the buyer would need to be confident in their due diligence process, to ensure that the relevant risks are identified and adequately addressed as part of the purchase agreement.
From a buyer’s perspective, one protection measure that could be implemented is a holdback on the purchase consideration until certain perceived risks have lapsed; i.e., the buyer would withhold the payment of a portion of the purchase consideration until holdback provisions have been satisfied. These holdback provisions can be either suspensive or resolutive. In certain instances, a seller may request that the cash portion subject to the holdback be placed in an escrow account; however, using an escrow account does result in the unproductive use of funds for both parties.
To avoid unproductive cashflow consequences, the parties could consider obtaining warranty and indemnity insurance, should certain hold-back provisions not be met. The downside of such a solution is that it is typically quite costly for both parties. Alternatively, where the seller does not outrightly divest from the business, and therefore maintains an interest in it, a portion of the shares that it maintains in the business could be offered as security for any warranty and indemnity claims.
The disposal or acquisition of a business interest can be notoriously complex, particularly when there is an air of scepticism amongst the parties, which typically leads to extensive due diligence processes and complex warranty and indemnity provisions. These complexities can be overcome by finding nuanced solutions to satisfy the needs of both parties. Ultimately, no two merger and acquisition processes are alike, and understanding the options that are available to solve these potential deadlock situations is the key to concluding a successful transaction.
Bobby Wessels is a Manager: Corporate and International Tax, and De Wet de Villiers a Director: Private Clients | AJM.
This article first appeared in DealMakers, SA’s quarterly M&A publication.
Listen to the latest episode of Ghost Wrap here, brought to you by Mazars:
Irongate launches its Australian industrial fund (JSE: BTN)
Burstone Group is providing 20% of the equity investment
The Irongate joint venture in Australia has announced its first industrial acquisition, being a A$57.25 million property in Sydney with a vacancy rate of just 0.2%. This deal effectively seeds the new Australian Industrial Property Fund.
At this stage, that fund is unlisted. Burstone Group (which was Investec Property Fund) will take 20% of the equity in this investment, coming in alongside Phoenix Property Investors with 80%. The Irongate joint venture (in which Burstone is a partner) will provide the fund and asset management services.
Overall, the benefit to Burstone is that the Irongate joint venture is a platform to grow its capital-light revenue and capabilities, with the underlying fund giving Burstone the ability to participate directly in the property equity as well.
Growthpoint gives a detailed quarterly update (JSE: GRT)
The South African portfolio is showing signs of life
It’s always a big deal when Growthpoint releases an update, as this is the best way to see broad performance in the property sector.
Looking at the South African portfolio, the lease renewal rate of 78.2% this quarter is a big jump from 64.9% for FY23. Not only are vacancies down from 9.4% to 9.1%, but the average period on renewals is higher too. Escalations on renewal increased from 6.8% to 7.3%, so the pain of higher costs and funding rates is starting to be passed on to tenants. But replacement leases in the case of a tenant moving out are still coming in with negative reversions (i.e. cheaper than the lease being replaced), although -7.5% is a lot better than -12.9% previously.
Overall, there’s improvement in the retail and industrial sector along with gradual progress in the recovery of the office sector. Office vacancies are still a big headache, coming in at 18.9% with a renewal success rate of just 51.8%. It’s incredible to compare the Western Cape (single-digit vacancy rate) to Sandton (27.7%).
Growthpoint is only recovering 12.1% of its diesel costs from retail tenants. They hope to increase this to 30% in FY24, so that’s not good for food inflation. Lease addendums will seek to recover actual diesel consumption, not a fixed levy.
As usual, the jewel in the local crown is the V&A Waterfront, with a 32% increase in international air passengers into Cape Town driving a 9% increase in earnings before interest and tax.
Looking at the specific investment funds, Growthpoint Healthcare REIT has a loan-to-value of 14.8% and is busy with the acquisition of the Johannesburg Eye Hospital, but higher arrears mean that no growth is expected in distributable income per share in FY24. The Growthpoint Student Accommodation REIT has a vacancy rate of just 8%, with a few developments underway, but the expiry of a rent guarantee will significantly impact distributions. The portfolio in Nigeria isn’t appealing either, with a loan-to-value of 41% and some headaches on financing costs over the next couple of years.
If we shift our focus abroad, the notable update is that Growthpoint has increased its stake in Capital & Regional from 62.4% to 68.1% as part of supporting the acquisition of The Gyle Shopping Centre in Edinburgh.
The group balance sheet reflects a weighted average interest rate of 9.6%, or 7.0% after interest rate swaps and foreign-denominated loans are included. There was no significant refinancing activity in this period.
Finally, there’s a fascinating update around green energy. Known as a “wheeling agreement”, solar power from the Constantia Village shopping centre was injected into the city’s grid for use at Growthpoint’s office building in the foreshore. This is literally an exchange of energy between two Growthpoint-owned properties.
I try to temper my enthusiasm as a very happy semigrator to Cape Town, but it’s tough sometimes to be objective. It’s just great to read stuff like that.
Back to Growthpoint’s numbers, distributable income per share guidance for FY24 is unchanged, which means shareholders are still in for a tough time overall.
Heavy client cash outflows at Old Mutual (JSE: OMU)
A third quarter update gives us a good view on year-to-date performance
Old Mutual is a giant of an organisation, so you can expect to see varying levels of performance at segmental level. By the time you see this as a group number, the outcome is usually a lot smoother due to offsetting effects of strong and weak segmental performance.
A third quarter update means we now have a view on the nine-month performance this year.
Life APE sales only increased by 4%, but that was because of a product in China that was in the base period and subsequently discontinued. Excluding China, it was up 13%.
Gross flows grew 8%, driven mainly by the businesses in the rest of Africa. There were also premium increases elsewhere in the business that brought cash in.
Net client cash flow is an ugly number though, showing an outflow of R10.8 billion vs. an outflow of R1.2 billion in the prior period. Cash is being pulled out from Old Mutual Investments as clients face economic difficulties and need to dig into savings. There were also some rotations from large offshore players that impacted this number. The highlight is that Old Mutual raised R8.4 billion in the Alternatives business, which is a higher margin operation.
The loans and advances book grew by 2%, a function of Old Mutual’s cautious lending strategy in this environment.
Finally, gross written premiums grew by 11% excluding the acquisition of Genric Insurance Company. With that acquisition included, they grew 15%.
CFO Casper Troskie is due fore retirement in April 2024. To help with IFRS 17, he’s sticking around for another year.
Pan African Resources is making more gold at just the right time (JSE: PAN)
With the gold price doing well at the moment, this is what investors want to see
Pan African Resources has released a production update for the six months ending December. Yes, they’ve gotten the crystal ball out to give production guidance.
Gold production is expected to be between 2% and 6% higher. If we look ahead to the full financial year, there’s a small uptick in the lower range of production guidance. The group now expects to get between 180,000oz and 190,000oz of the yellow stuff out the ground vs. 175,209oz in the base period.
Looking even further ahead, completion of the MTR plant at Mogale is expected in the second half of the 2024 financial year. This project is expected to add around 25% a year in annual production!
If the gold price can sustain these levels, this is a great example of peaking at the right time.
Primeserv’s numbers went the right way (JSE: PMV)
Here’s the income statement shape you want to see
With a market cap of around R160 million, Primeserv sits firmly in the small cap bucket on the local market. The company has released results for the six months to September and the year-on-year picture tells a good story.
Revenue increased by 15% and operating profit by 21%, so there’s an improvement in operating margin. Headline earnings per share also moved higher by 21%, which tells you that there aren’t any funnies in the numbers in terms of once-offs.
The interim dividend is up 25% to 2.50 cents per share.
In terms of sector split, the company earns 30% of its revenue from engineering and mining project support services and 46% from the logistics industry.
Mid-teen growth at Reunert (JSE: RLO)
Unsurprisingly, the renewables space is becoming highly competitive
Reunert announced results for the year ended September 2023 and they reflect a 24% increase in revenue. Growth of 16% in HEPS is nothing to get upset about, but it’s well below the HEPS increase. The final dividend is 11% higher.
The group has been investing in its ICT segment, with two acquisitions in 2023. I think they need to be careful here, as the ICT sector is incredibly good at dishing up margin compression because of high levels of competition and largely homogenous product offerings. Indeed, segment revenue was up 18% and operating profit could only manage 2% growth in this period.
Another major focus area is the renewable energy market, helped along by Eskom. Large-scale containerised storage solutions will be the underpin of the business going forward, with the group noting that competition is really heating up across the solar space. The solar operations form just one part of the Applied Electronics segment, which grew revenue by 51% and operating profit by 163%.
The Electrical Engineering segment is strategically important because this is one of the areas where the group can grow internationally. Segmental revenue increased by 14% and operating profit was up 27%. As we’ve seen in so many companies that supply US-based firms, customer destocking in the US led to reduced volumes in that export market for the first three quarters of the year.
Overall, it’s a solid result for Reunert with decent growth drivers going into the new year. The share price is up 18% this year, so this is a good example of a relatively off-the-radar company (at least for retail investors) doing well.
RFG Holdings says thanks to the rand (JSE: RFG)
And to demand for pies!
RFG Holdings is on the right side of both revenue growth and margin expansion. With results now available for the year ended 1 October 2023, we see that revenue was up 8.7% and group operating margin expanded by 170 basis points to 9.6%.
It gets even better as you move further down the income statement, with diluted HEPS up 35.4% and the dividend following suit with a consistent payout ratio. Cash generated from operations jumped by 59.8%, so these are high quality earnings from a cash perspective.
And on top of all of this good news, return on equity improved from 12.5% to 14.9%.
It’s not all roses and sunshine. RFG only grew because of pricing increases, as group volumes fell by 8.3%. Also take note that foreign exchange gains contributed 340 basis points of revenue growth and the acquisition of Today was good for another 90 basis points. If you look even deeper, you’ll see that local volumes were down 6.6% and international volumes fell 13.6%, so the weak rand did wonders for the group level result.
It says a lot about consumer pressures that areas of strength include long-life products (less wastage) and demand for pies (a cheaper way to fill tummies). The canned fruit and vegetable categories struggled as consumers buckled under price increases in that aisle.
No additional suitors were found for Textainer (JSE: TXT)
The “go-shop” opportunity has now ended
Textainer is due to be acquired by Stonepeak, an alternative investment firm focused on infrastructure and so-called real assets. The deal price is $50 per share, putting an enterprise value of $7.4 billion on the group.
The interesting thing with this deal is that it included a go-shop clause, which gave Textainer and its advisors a 30-day window period in which to try solicit a better offer. There was no luck in terms of finding a better or even alternative proposal, so Stonepeak is the only bidder in town.
Assuming Textainer shareholders say yes to this offer, the deal is expected to close in the first quarter of 2024.
Little Bites:
Director dealings:
A non-executive director of Richemont (JSE: CFR) has bought shares worth around R8.5 million. Separately, a non-executive director bought shares worth R55.5k.
Mark Olivier seems to be the new Des de Beer, buying another R1.16 million worth of shares in Lighthouse Properties (JSE: LTE).
There’s a very unusual appointment in the banking industry, with Jason Quinn announced as CEO-designate of Nedbank (JSE: NED). Now, if that name seems familiar, it’s because Quinn was the interim CEO of Absa (JSE: ABG) from April 2021 to March 2022 and is currently the Financial Director of that group. He will join Nedbank from 31 May when Mike Brown steps down as CEO, bringing with him a deep understanding of one of Nedbank’s biggest competitors. This is quite the coup for Nedbank! Quinn has stepped down from the Absa board with immediate effect for obvious reasons. Chris Snyman moves into the Interim Group Financial Director role to replace him.
The CEO of Aveng (JSE: AEG) is retiring from the top job with effect from 1 March 2024. His replacement is Scott Cummins, the current CEO of McConnell Dowell, which is Aveng’s largest subsidiary. Rather than Scott moving to South Africa, the current CFO Adrian Macartney will be taking advantage of the opportunity to move from Joburg to Melbourne. I’m sure he can’t buy his ticket quickly enough! On a serious note, the epicentre of the group is moving to Australia, so that’s an important strategic point.
The formal documentation for the MiX Telematics (JSE: MIX) – PowerFleet proposed merger has been delayed. The intention was to distribute the circular and prospectus by 5 December, but there are various regulatory approvals that are needed and the documents should ideally be issued simultaneously. On this basis, the Takeover Regulation Panel (TRP) has granted an extension for the issuance of the scheme circular to no later than 31 January 2024.
Sibanye-Stillwater (JSE: SSW) announced the reference price for the $500 million raise of convertible bonds. In case you missed the news yesterday, they can be converted at a premium of 32.5% to the 30-day VWAP. That conversion price has now been announced as $1.3367 per share. The rand price based on which this was calculated is R18.55. Note that the dollar price is now locked in.
Sable Exploration and Mining (JSE: SXM) executed a rights offer that could barely have been more ignored by shareholders. Minority shareholders took up just 0.59% of the shares offered to the market. As underwriter, PBNJ trading and Consulting picked up 89.04% of the raise. This was very much the intention behind this capital raise of R52 million.
Steinhoff Investment Holdings (JSE: SHFF), which is the issuer of preference shares in the group, will change its name to Ibex Investment Holdings.
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