By Jackie Cameron
- South African Airways, the beleaguered state-owned airline that’s reliant on government financial support to continue operating, has started a restructuring process that could see its workforce cut by almost a fifth, says Bloomberg. As required by South African law, the carrier has started talks with labour unions about its plans, which could affect 944 of its 5,149 employees, SAA said in an emailed statement. The proposed restructuring includes all SAA divisions and departments, excluding its Mango Airlines, Air Chefs and SAA Technical units, it said. The airline is one of several state-owned companies, including power utility Eskom, the South African Broadcasting Corp. and state arms manufacturer Denel that are fighting poor finances after years of mismanagement and alleged corruption. SAA has incurred more than R28bn ($1.9bn) in cumulative losses over the last 13 years and missed the deadline to submit its earnings for the financial year ending March. While it recently received a R5.5bn lifeline to extend maturities on outstanding debt, it hasn’t been able to reach an affordable repayment plan with creditors.
- One of South Africa’s most respected investment professionals, Allan Gray, has died. The billionaire founder of the Cape Town-based asset manager that bears his name and Bermuda-based Orbis Group, died on Sunday. He was 81, says Bloomberg .It is with deep sadness that we share the news,” the company said in an emailed statement on Monday. “He has earned his rest.” A Harvard Business School graduate, he founded Allan Gray Investment Counsel in Cape Town in 1973 and served as chief executive officer for 15 years before starting Orbis in 1989. At the end of 2015, he transferred control of the business to the Allan & Gill Gray Foundation, with dividends used for philanthropic purposes. Gray died of a heart attack. Allan Gray has total assets of R544bn ($37.3bn), including mutual funds of about R290bn, the company said in an email. Orbis oversees $36bn, according to its website.
- Impala Platinum is in talks to buy land in Zimbabwe from rival Anglo American Platinum as the world’s second-biggest producer of the precious metal seeks to boost output from the southern African country, according to people familiar with the negotiations, reports Bloomberg. Impala and Amplats mine most of their platinum group metals in neighbouring South Africa, which has the world’s biggest reserves of platinum. But Zimbabwe’s deposits, second only to South Africa’s, are shallower and therefore cheaper to mine.
- The Saldanha Works steel plant has become South Africa’s first state-backed industrial mega-project conceived to counter sanctions during apartheid to close, as making a profit in the open economy overrides the case for strategic industries, says the news agency.
- Facebook must pay €10,000 ($11,000) each time the posts using the image of John de Mol appear, up to a maximum of €1m, an Amsterdam court ruled Monday, says Bloomberg. Facebook doesn’t have the technology to completely prevent fraudulent ads on its platforms, its attorney, Jens van den Brink, said at a hearing two weeks ago. Because webpages are constantly changing, the social media site argued, it’s hard to target individual advertisements. Similar scam ads have been on LinkedIn., eBay and Alphabet’s Google, showing how difficult a ban would be, he added.
- Most analysts may be predicting South Africa will lose its last investment-grade rating, but derivatives traders couldn’t care less, says Bloomberg. Their bearish bets on the rand, measured by risk-reversal contracts, have fallen to the lowest level since before the 2007-08 global financial crisis. The premium of options to sell the currency in the next six months over those to buy it, known as the 25 Delta risk reversal, dropped to 2.42 percentage points on Friday, extending its fall this year to 1.2 percentage points.
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