Tyme Group lands a strong Series D raise – and that’s great news for African Rainbow Capital (JSE: AIL)

The total valuation for Tyme is now $1.5 billion

Tyme Group has been a lovely success story, as evidenced by a Series D raise that injects another $250 million into the group at a valuation of $1.5 billion. In startup land, that’s a really big deal and it sets the group up for an IPO in the next four years or so. The fact that the raise was oversubscribed is also extremely encouraging.

Nubank (a global digital banking group) led the round, investing $150 million. The M&G Catalyst Fund put in $50 million and the remaining $50 million was from existing shareholders, including African Rainbow Capital.

Tyme Group really isn’t messing around, with an ambition to become a top three retail bank in South Africa within the next three years. Just consider the competitive threat they are therefore posing to the established banks who already received a hiding from Capitec over the past couple of decades.

This is proving to be an incredible investment for African Rainbow Capital and I just hope that ARC will stay listed long enough for existing shareholders to get the full benefit of this journey to Tyme’s intended listing by 2028. As a sign of how important this asset is to the group, African Rainbow Capital’s share price closed 9% higher on the day.

Jubilee reminds the market that it isn’t immune to African electricity challenges (JSE: JBL)

It should be clear why securing private power supply has been such a priority

Jubilee Metals is struggling with lost production hours at the Roan facilities in Zambia due to infrastructure issues. This has led to a nasty drop of over 14% in the share price, adding to recent downward momentum. Mining is no joke at the best of times and especially in Africa.

The problem is that unplanned blackouts on the national power grid have led to outages at Roan, which doesn’t benefit from the private power supply that Jubilee manages to secure for other operations like Sable, Munkoyo and Project G. The impact is that there is uncertainty around whether production volumes will be met for the second quarter.

It really is a case of Bring Your Own Infrastructure when doing business in Africa, especially in power-hungry sectors like mining.

In happier news, Jubilee is still busy with its due diligence to acquire the Large Waste Project. The commercial terms have also improved, with the purchase price down to $18 million payable over 12 months, of which $11.5 million would still need to be paid. They expect to conclude the due diligence by January 2025.

A disappointing exit in the end for Metair from the Turkish operations (JSE: ORN)

Ongoing losses have led to a major downward adjustment to the disposal price

Metair seems to have gotten out of Turkey just in time, admittedly with very little to show for it. After initially announcing a sale of Mutlu Group for a disposal consideration of $110 million that was subject to net debt and working capital adjustments, Metair will get just $5 million in net proceeds. This is because debt has ballooned as Mutlu has continued to struggle with hyper-inflation and high interest rates.

Still, they needed to get out of the thing desperately. The old adage of “your first loss is your best loss” applies here. It takes a lot of pressure off the balance sheet, allowing Metair to move ahead with deals like the acquisition of AutoZone in South Africa. The final amount for that deal was R278.5 million, with a nominal amount for the equity and the rest needed by AutoZone to settle debtors (R203.5 million) and fund its working capital requirements (R75 million).

All they can do is move forward from here. If ever there was a company that is due a change in luck, it’s Metair. They really have had a tough time. A big part of the way forward is a balance sheet restructure, with Standard Bank agreeing to extend the existing bridge facility. Metair plans to present a final capital structure plan to its board and funders by March 2025.

Before that, an operational update is scheduled for release in February 2025. With the share price having lost around 40% of its value this year, the market will watch that closely.

Orion aims to release its Bankable Feasibility Study in January 2025 (JSE: ORN)

The latest drilling results will be incorporated in the BFS

Orion Minerals has received a set of drilling results from Flat Mine South. I certainly don’t pretend to understand any of the geological metrics, but the management commentary around the results sounds bullish

In fact, the results are strong enough that the company has made the decision to redesign certain elements of the Flat Mine South mining strategy. The Bankable Feasibility Study (BFS) is due for release in January 2025, a huge milestone for any junior mining group.

Sirius acquires a development site in Germany (JSE: SRE)

This is the final piece in the puzzle for this development opportunity

Sirius Real Estate is known for being a strong buyer and developer of properties, ranging from ground-up development through to value-add activities designed to fix underperforming properties. This has proven to be a solid strategy in Western Europe and the UK, regions that have claimed many scalps in property.

The latest such deal is an acquisition of a development site in Munich for €13.3 million. This is adjacent to the Munich-Neuaubing business park, with Sirius referring to it as the “final corner” of the estate. This gives Sirius lots of options regarding future development, so they seem to have completed a jigsaw puzzle here.

The acquired site comes with a rent roll of €740k per annum, so there’s some cashflow in the meantime that can also be enhanced by changes to the tenant base.

Transaction Capital’s Road Cover disposal is unconditional (JSE: TCP)

This is another important milestone in the group restructure

Transaction Capital has been taking various steps towards being focused on the Nutun business, although recent results have shown us that even Nutun is facing a number of challenges. At least a potential source of management distraction has been taken off the table, with the Road Cover disposal being finalised after the commitment agreement was signed.

This makes SA Taxi Holdings the owner of Road Cover, with the purchase price left on loan account. This is part of the support that Transaction Capital is giving to the Mobalyz business (the old SA Taxi) in an effort to see that business survive.

Nibbles:

• Director dealings:
  • A director of Sabvest (JSE: SBP) acquired shares worth R2.1 million.
  • A director of a subsidiary of Oceana (JSE: OCE) sold shares worth R276k.
  • A non-executive director of Mondi (JSE: MNP) bought shares worth €7.45k.
  • A director of a subsidiary of PBT Group (JSE: PBG) bought shares worth R41.8k. There’s also been a reshuffling of a small part of the B-BBEE stake held by Spalding, with roughly 1.0% in PBT Group being sold to TheIntrepid Projects, known as TIP. This takes TIP to 2% in PBT Group and Spalding down to 25.4%. Various directors have direct and indirect exposure to that transaction.

• Telkom (JSE: TKG) is another step closer to finalising the disposal of the masts and towers business to Actis. Having already received shareholder and Competition Commission approval, the latest approval to add to the collection is from ICASA. That’s another big one out of the way, with some conditions still to be met before the deal can close.

• Shareholders in property funds continue to give strong support to dividend reinvestment alternatives. The funds love this mechanism as it helps them retain cash through issuing new shares in lieu of a cash dividend. Vukile Property Fund (JSE: VKE) is a recent example, with holders of 39.43% of shares in the fund electing to receive shares in lieu of a cash dividend. This helps Vukile retain R264.5 million in equity, which is a lot! Sadly, it also means that those who chose the cash have been diluted and this impact will come through in distribution per share growth, which is impacted by having more shares in issue.

• Nigerian energy group Oando (JSE: OAO) has very little liquidity in its stock, so I’ll just give the results a mention down here. Revenue grew 36% in the nine months to September, but profit after tax fell 31%. As is the case for so many Nigerian companies, foreign exchange losses on debts were a major cause of the drop in profit.

• Marshall Monteagle (JSE: MMP) is in the same boat, with very little activity on the share register. For the six months to September, revenue from continuing operations fell 15%, yet profit before tax was up 325%! HEPS from continuing operations jumped from 1.7 US cents to 7.0 US cents. Despite this, the interim dividend only moved slightly up from 1.9 US cents to 2.0 US cents.

• Although it seems that there’s no real value left for shareholders in Tongaat Hulett (JSE: TON), it’s still worth mentioning that the business rescue practitioners have moved ahead with the sale of the South African assets to Vision Sugar. Sale agreements for the non-South African assets are still being finalised.