Zanu-PF wants to delist Old Mutual; new SAA CEO has R10bn backing; Eskom; Aspen; Sun International; Foschini

By Jackie Cameron

  • Zimbabwe’s ruling party wants Old Mutual Ltd.’s listing on the Zimbabwe Stock Exchange terminated, an official said, clarifying a weekend statement in which it called for the company to be “ejected” from the nation’s financial system. “The statement was about the listing of Old Mutual on the stock exchange,” Tafadzwa Mugwadi, the Zimbabwe African National Union-Patriotic Front’s director of information and publicity, told Bloomberg. The party will issue an official statement on the matter later, he said. Old Mutual is the largest company trading on the Harare stock exchange. Zimbabwe suspended trade on the domestic bourse on June 28 as part of a state effort to end the nation’s economic crisis, says Bloomberg. The government wants to eradicate the Old Mutual Implied Rate, a gauge used by domestic companies to determine the future cost of goods and services. For more on the Zimbabwe crisis, join the BizNews Midweek Catchup webinar today, Wednesday, 15 July. Joining BizNews host Linda van Tilburg to answer your questions are Tara O’Connor from Africa Risk Consulting, Zimbabwean economist Tony Hawkins and Zimbabwe financial services expert Sean Gammon, managing director of Imara Corporate Finance. (Register: https://attendee.gotowebinar.com/register/2632221349207190800.)
  • SAA is getting ready for take-off again, with a new interim CEO Philip Saunders appointed to oversee the “restructuring of a new competitive airline, born out of the old”. The Department of Public Enterprises has approved a plan that needs government backing for R10bn in funding for SAA. At a meeting convened by the Business Rescue Practitioners (BRPs) for SAA, 86% of creditors voted to support a business rescue plan for the airline. The Department of Public Enterprises has denied that SAA is a ‘vanity’ project.  SAA has guzzled billions in taxpayers funds, with the past decade characterised by gross financial mismanagement and corruption at the state-owned airline.
  • An Eskom tender that grew from R114m to staggering R14bn ‘may’ have been illegal, says an investigator. Eskom Holdings may have broken tender laws in concluding a 2005 agreement with Black & Veatch that increased more than 100-fold in cost, according to a probe of the contract commissioned by the South African utility. A former High Court judge who conducted the investigation, which cleared Eskom Chief Operating Officer Jan Oberholzer of corruption, questioned why the cost of the continuing contract increased to more than R14 billion ($833 million) from an initial R114 million. He said the deal should be investigated.
  • Cash-strapped Sun International will tap shareholders for funds in a R1.2 billion ($71.48 million) rights issue, the hotel and casino owner said on Tuesday. The owner of Sun City resort will use the rights issue funds to improve its short to medium-term liquidity and strengthen its balance sheet as the coronavirus restrictions hit its operations. The company will offer 127 million shares at 9.44 rand each, representing a 25% discount, reports Reuters.
  • The Foschini Group (TFG) said on Tuesday it was looking to raise up to R3.95 billion ($235.35 million) through a rights offer to cut its debt, as the South African retailer faces challenges in its core markets. “The board of directors and management of TFG believe it is prudent and necessary to reduce TFG’s financial indebtedness now by way of the rights offer,” the company said in a statement, according to Reuters. TFG on Monday announced its plan to acquire certain stores and selected assets of Jet from Edcon’s administrators.
  • Aspen has offered to cut prices by an average of 73% for six off-patent cancer drugs, EU antitrust regulators said on Tuesday. This is a move that could help the South African pharmaceutical company avoid a potentially hefty fine, says Reuters. The European Commission opened an investigation into Aspen in 2017 following concerns it may have charged excessive prices for drugs critical in treating patients suffering from certain types of life-threatening cancer, such as leukaemia and multiple myeloma, says the news agency. Aspen’s price cuts will cover all of Europe except for Italy, which imposed a five million euro ($5.68 million) fine on the company in 2016 for price hikes of up to 1,500% for some drugs, adds Reuters.
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