Old Mutual suffers major loss; Tesla to sell $5bn of shares; Ecsponent; Eskom

By Claire Badenhorst 

• Cape Town-based insurance company Old Mutual reported a loss of R5.6bn for the past six months. It has also put its interim dividend on hold and warns of drop in full-year profit. As brokers had limited access to customers’ homes and workplaces during lockdown, they were unable to sell new policies and products during this time. The 175-year-old insurer has replaced its medium-term financial targets with new ones that are more appropriate to the pandemic, and more focused on solvency and liquidity. Old Mutual also plans to save R750m in costs over the next months.
• Tesla plans to sell as much as $5bn of shares, capitalising on its high-flying stock and on a recent share split that made it more accessible to retail investors. Elon Musk’s car-making company has had several sales over the past decade, which have supported the company’s cash during its transition from a niche electric car maker to the mass market.
• The South African Post Office, Eskom, and the SABC are among several state companies requesting a monetary bailout. In a finance ministry presentation to Parliament on Tuesday, South African state companies have requested billions of rand in funding from the government to help them weather the impact of the pandemic. The SABC is seeking R1.5bn and airports company ACSA has applied for an equity injection of R3.5bn. Denel, which makes military equipment for South Africa’s armed forces, faces the risk of entering bankruptcy protection or being liquidated. While it remains unclear how much funding will be issued to the state firms, South Africa’s economy is forecast to contract at least 7% this year because of the coronavirus crisis and its budget deficit could balloon to as much as 16% of GDP in the current fiscal year.
• The board of directors of financial services group Ecsponent has announced that it will be conducting a forensic investigation into the use and distribution of funds received under a third-party term loan facility. According to the statement, “$7.5m of funds received by a Mauritian-based subsidiary of the company under a third-party loan facility may have been misappropriated”. To read the full announcement, go to BizNews.com.