The world is changing fast and to keep up you need local knowledge with global context.
By Linda van Tilburg
- South African Airways (SAA), which entered a form of bankruptcy protection in December, will scale back some of its domestic and international routes from the end of February. International routes to be closed from Feb. 29 include Johannesburg to Abidjan via Accra, Entebbe, Guangzhou, Hong Kong, Luanda, Munich, Ndola and Sao Paulo. The airline will continue to serve Cape Town on a reduced basis but will cease operations to domestic destinations including Durban, East London and Port Elizabeth from the end of the month. The specialists appointed to try and rescue the airline said SAA would also seek to deploy more fuel-efficient aircraft, renegotiate contracts with suppliers, reduce the number of its employees and consider asset sales as part of the rescue efforts. Business rescue practitioners Les Matuson and Siviwe Dongwana said in a statement that the initiatives they are taking would strengthen SAA’s business.
- Meanwhile the Johannesburg High Court has ruled that another state-owned airline SA Express should be placed into business rescue, but the airline is going to appeal against the ruling. News24 reports that Transport and logistics company Ziegler filed the application for business rescue to recover R11.3m of debt. SA Express indicated that they thought the court went over and above what was required and granted orders not sought by the applicant. SA Express also said the court had not made any order on whether the matter was urgent or not. The airline instructed its lawyers to apply for leave to appeal. SA Express was given a R300m lifeline in September last year on top of the R1.2bn it was allocated in the February 2019 budget.
- State-owned entity, Denel has announced that it is at an advanced stage of exiting the greater part of its Aerostructure Manufacturing business and has put in place major steps to minimise job losses in the company. It follows what Denel calls a mutual agreement between Denel and its customers to transfer the manufacturing of airport parts to alternative suppliers as the business was no longer sustainable. Denel Group Chief Executive Officer Danie du Toit said the decision to wind up the company is in line with the broader long-term strategy to reposition Denel and return it to profitability. He said the winding up of the Aerostructure Manufacturing business will not affect other businesses conducted by Denel Aeronautics at the Kempton Park campus. This includes the support given to the Rooivalk combat helicopter, the Oryx medium transport helicopter, the C130 transport aircraft together with the export business for the Cheetah multi-role fighter aircraft and Puma helicopter and various maintenance, repair, and overhaul (MRO) services provided to the SA Air Force and other customers.
- South African business confidence had the worst start to a year since 1993, that is a year before the country’s first democratic elections. The South African Chamber of Commerce and Industry’s Index measuring sentiment declined to 92.2 in January from 93.1 in December. The Chamber said decisive developments in Ramaphosa’s fourth state-of-the-nation address next week and Finance Minister Tito Mboweni’s budget speech on Feb. 26 “could determine the economic performance and business climate for the longer term.”
- South African stocks may have become too cheap for investors to ignore and Old Mutual Investment Group is among money managers seeing an increasing number of attractively valued shares. The Johannesburg market has fallen to its least expensive levels in more than seven years, dragged lower by the faltering local economy. The Head of Macro Solutions at OMIG, Peter Brooke told Bloomberg that the South African market five years ago was expensive, but there is more and more value appearing, and there are more and more companies that they see as attractive, and they would be looking to apply cash in those areas. Share-price declines have outpaced the drop in company earnings, resulting in higher dividend yields and relatively low price-earnings ratios. News from the Johannesburg Stock Exchange is that Steinhoff shares fell back by more than 12% after 47% surge reaching a 10-month high yesterday amid reports that buyers were circling its Pepco group.
(Visited 154 times, 1 visits today)
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.