By Siyabonga Mkhwanazi for IOL
The government has announced the sale of a majority stake at cash-strapped SAA with a black-owned consortium pumping in more than R3-billion to get the majority slice of the stake.
Public Enterprises Minister Pravin Gordhan said on Friday said after the conclusion of all business rescue process the purchase agreement will be signed with Takatso consortium consortium.
The consortium, which paid more than R3bn for the stake, will own 51% of SAA while the government will have a 49% stake in the airline.
Gordhan said this was a start for the airline with the new equity partner.
He said boards will be representative on the basis of 51% and 49%.
“How much is the equity partner putting in, as I have said more than R3bn. All the other subsidiaries are being evaluated,” said Gordhan.
SAA has been in trouble for many years and has not been able to make a profit over the last 10 years.
The government has been pumping in bailouts to the value of billions of rands in the last few years.
Gordhan said after the equity partner has come on board SAA will no longer rely on bailouts for its survival.
Parties have been calling for an end to bailouts of state-owned entities and government had also been getting them to strengthen their balance sheets.
Source: Eyewitness News
The Competition Commission has, in what’s been described as a historic move, blocked the sale of Burger King SA by Grand Parade Investments.
It’s the first time that the commission blocked a merger purely on public interest grounds, according to the Competition Commission’s Tamara Paremoer.
She also said that regardless of the assessment on competition, there was legislation that required the commission to determine whether or not a transaction can be justified on public interest grounds.
“We found that this merger does not pass that threshold, so it has a negative effect because it does not promote a greater spread of ownership,” she said in an interview with Bruce Whitfield on 702.
It’s unclear if Grand Parade, one of the country’s oldest empowerment companies will challenge this decision in court. But the commission advanced its reasons, among them, the BEE credentials of the buyer, Emerging Capital Partners, were not good enough.
In response to the decision, BEE expert Safiyya Patel, a partner at Webber Wentzel, gave insights on what the commission’s decision could mean for black shareholders.
“The decision could limit the market these broad-based shareholders could now be selling their assets into, given that a black shareholder might not be in a position to sell the assets to non-black shareholders because of these public considerations, and that a potential merger might be blocked by the Competition Commission,” Patel told Whitfield.
By Khulekani Magubane for Fin24
The Public Investment Corporation, which manages civil servant pensions, plans to sell 70 properties – including shopping malls and commercial buildings.
First on the chopping block are Edcon’s former training campus and two shopping centres in Cape Town and Durban.
The proceeds of the sales will be invested in other opportunities, the PIC said.
The Public Investment Corporation wants to sell 70 properties – including malls and office buildings – in the coming months.
The properties are currently held in the Government Employee Pension Fund’s portfolio, and the PIC, which manages civil servant pensions, has formed a joined venture with real estate firms to dispose of the buildings.
The state-owned asset manager – which has over R1.9 trillion in assets under management – says it is seeking to “optimise” the GEPF’s property portfolio.
But this may not be the best time in recent years to sell South African commercial and retail properties, which have been ravaged by Covid-19. Many landlords are struggling to contain an exodus of tenants as the pandemic kept shoppers out of malls, while the work-from-home trend continues to depress the demand for offices.
The PIC wants to sell the properties in two tranches. The first group of 25 retail, industrial and student housing buildings will go on sale first, while a second tranche of 45 properties, which are mostly commercial and specialised, are due to be released in July. The properties also include schools and data centres.
Edcon’s former training campus with hotel and conference facilities in Ormonde, Johannesburg, as well as a tenanted industrial unit in Lyttelton Manor Pretoria, the Palm Grove Shopping Centre in Durbanville, Cape Town and the Village Market Shopping Centre in Westville, Durban will be part of the first tranche.
The disposal of the properties will be brokered by Jones Lang LaSalle (JLL), the large UK-owned real estate firm, and the Empact Group, which is wholly owned by Thebe Investment Corporation. This is the first time that the PIC has appointed commercial agents to broker the sale of GEPF properties. The companies were appointed through a tender process.
“In order to give confidence to investors participating in the sales process, we have appointed a commercial property JV to oversee the sale of a portion of the portfolio. Our appointed agents will manage the entire process from marketing to deal closure. We specifically wanted to make this an external process to give the market confidence in the sales,” said PIC CEO Abel Sithole.
He said the proceeds of the sales will be invested into other investment opportunities.
The PIC is also on an ongoing mission to restore its credibility after a string of investments it made in the past decade went awry, including in Ayo Technologies and Steinhoff. The governance of the asset manager was subject to a commission of inquiry chaired by Justice Lex Mpati.
By Sandile Mchunu for IOL
The Bidvest Group has signed an agreement with National Aviation Services (NAS), Colossal Africa and a consortium consisting of the current executive team to acquire its business BidAir Services for an undisclosed amount.
BidAir is the country’s largest ground handling company and its acquisition is subject to regulatory approvals, as well as permission from the Airports Company of South Africa (Acsa), which manages South African airports.
NAS chief executive Hassan El-Houry said NAS prides itself on its global expertise and local knowledge.
“We believe that the success of the aviation industry in Africa is tied to its economic prosperity and have made significant investments into the industry across the continent.
“We look forward to adding BidAir Services, the largest South African ground handling company to our expanding network.”
BidAir provides quality-handling services, including passenger and ramp handling, load control and operations, cleaning, toilet and water services, among others at nine South African airports.
Bidvest took a decision to divest from BidAir and Bidvest Car Rental following a detailed strategic review of all its businesses and the group wanted to sell the businesses to preserve as many jobs as possible.
In the year to end June 2020, the group said BidAir lounges was on track for a record performance but was curtailed in the pandemic-affected fourth quarter and reported a loss during the year.
BidAir has a clientele of more than 28 major airlines including international carriers such as Emirates, Etihad Airways, British Airways, Qatar Airways, Singapore Airlines, Air France, Ethiopian Airlines and RwandAir.
NAS and Colossal Africa said they are committed to investing into the development of facilities and infrastructure, latest equipment, technology, recruitment and training.
Colossal Africa director Cingashe Motale said as a 100 percent black women-owned investment holdings company their strategy focuses on the development of local capabilities while building a globally competitive company through strategic acquisitions and partnerships in their chosen sectors.
“This transaction involves all the elements that form part of that strategy and working with a partner of such calibre as NAS puts us on a path that fits all the pieces together,” Motale said. The current executive management team of BidAir will also ensure that there is a smooth transition to the new owners with no disruption.
NAS said following the acquisition it will focus on training to develop the knowledge and skills of local South African youth while offering more employment opportunities and career options with an emphasis on employment equity.
“One of the key offerings will also include the integration of IT and healthcare to support civil aviation and government authorities during emergencies such as the current Covid19 pandemic,” NAS said.
By Sibahle Motha for Jacaranda FM
Power utility Eskom has confirmed that it will finalise the sale of Die Wilge flats at the Kusile power station during the first half of the year (pictured).
Construction work at the flats began in 2008 at a budget of R160-million.
However, costs ballooned to more than R800-million by 2019 with the project now being abandoned and incomplete.
Eskom says the sale of Die Wilge and other properties form part of the power utility’s disposal of non-core immovable property.
The power utility has since managed to sell two high rise offices in Kimberley and Johannesburg, raising a total of R76.1-million.
Eskom says it aims to raise more than R2-billion from the sale of non-core property.
Edcon has announced that the sale of parts of the Edgars business in South Africa to Retailability (Pty) Ltd has been implemented, with all approvals from regulatory authorities and all conditions precedent either fulfilled or waived.
The sale includes the transfer of approximately 120 stores in South Africa together with the businesses conducted therein.
Retailability, a fashion retailer and a holding company of store brands including Legit, Beaver Canoe and Style, operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.
Retailability aims to ensure that ongoing operational business is its top priority, while integration work is moving ahead vigorously.
“We are pleased that we were able to close the transaction within two (2) months after the announcement. The closure of the transaction underlines the industry fit and the excellent compatibility between Edgars and Retailability’s strategic intent, infrastructure, and value chain. We are pleased by the significant saving of approximately 5,200 jobs as well as the continued commitment to the retail industry, economy, and the sustainability of the South African Edgars brand,” said business rescue practitioners.
The finalisation of the sale in South Africa indicates the achievement of a critical milestone in the Edcon business rescue plan. The parties will continue to co-operate and work towards concluding the sale of Edgars’ businesses in other various jurisdictions in Africa (namely Botswana, eSwatini, Lesotho and Namibia), where various regulatory approvals and conditions precedent remain
By Philippa Larkin for IOL
Taxi financer Transaction Capital has announced that it has concluded a subscription deal to buy a 49.9% stake in automotive retailer WeBuyCars, for R1.84billion.
The group said that WeBuyCars would continue to operate as an independent business within its specialised market, adjacent to SA Taxi, with this investment establishing Transaction Capital’s third market vertical. It said the investment had no integration risk for it.
WeBuyCars is currently owned 60% by the family trusts of founders Faan and Dirk van der Walt, 31.5% by Fledge Capital Proprietary and 8.5% by minority shareholders.
Transaction said it would pay R1.47bn in cash and R16467000 on newly issued ordinary shares at R20 per share for an aggregate value of R329.3million.
It said favourable trends amplified by Covid-19 were likely to accelerate growth in the used vehicle segment.
Chief executive David Hurwitz said: “This investment is an exceptional opportunity to own a significant interest in a trader of used vehicles in South Africa. The investment in WeBuyCars will be immediately value accretive, converting interest income on our undeployed capital into higher yielding operating earnings, accelerating Transaction Capital’s earnings growth rate. Options are in place, which if exercised and implemented, after regulatory approval, would result in Transaction Capital increasing its interest in WeBuyCars at a future date.”
The Competition Commission earlier this year scuppered Naspers’s deal to buy WeBuyCars over fears that it could have led to a substantial reduction in competition in the car-buying market.
Transaction Capital said that WeBuyCars was uniquely positioned in its market segment, highly competitive and entrepreneurial founder-led business, with an impressive 20-year track record.
Hurwitz said he expected Transaction Capital to return to strong organic earnings and dividend growth above 2019 pre-Covid-19 levels for the 2021 financial year and beyond. Transaction Capital declined 0.38% on the JSE yesterday to close at R18.20.
The Foschini Group says it has concluded a sale agreement with Edcon for some of the stores and assets of Jet.
The Foschini Group (TFG) has reached an agreement with Edcon’s business rescue practitioners to buy some of its subsidiary Jet’s assets. The fashion retailer first announced over a month ago that it had made a R480 million offer to buy some 371 “commercially viable” Jet stores.
Edcon, which owns Edgars and Jet Stores, filed for voluntary business rescue in April after the nationwide lockdown exacerbated its already dire financial position. In June, its BRPs said the only way to save the company was through an “accelerated sale” of its divisions.
“TFG is pleased to announce that it has successfully negotiated and concluded a sale of assets agreement with Edcon and its Business Rescue Practitioners on 14 August 2020 and on principally the same terms as those set out in the conditional offer,” wrote the company in an announcement published on the Stock Exchange News Service on Monday.
TFG’s conditional offer provided for TFG to acquire the Jet brand, a minimum of 371 stores including a distribution centre located in Durban, as well as certain stores in Botswana, Lesotho, Namibia and Eswatini.
The offer also included the acquisition of at least R800 million worth of stock and property and equipment.
TFG said the sale of asset agreements in Botswana, Namibia, Lesotho and eSwatini stores has not yet been finalised, but is expected to be executed shortly. To conclude the acquisition, TFG is waiting on approval from competition authorities, amended lease terms from landlords, and confirmation from unsecured credit provider, RCS Cards, that it will continue providing credit for Jet customers.
“Based on the positive progress to date, the parties believe that the remaining conditions precedent could be fulfilled by the end of September 2020,” said the company.
Source: Algoa FM
The owners of the South African fast-food franchise Domino’s Pizza have moved to auction off the contents of their stores throughout the country.
Owner JSE-listed Taste Holdings announced late in 2019 that it would be exiting the food business (Starbucks, Domino’s Pizza, Maxi’s and The Fish & Chip Co.) and shifting its focus to luxury goods.
The decision to auction off the franchise was made after Taste Holdings failed to acquire an investor for the ailing business.
Park Village Auctions (PVA) is the company responsible for the upcoming auction of Domino’s Pizza.
Offers to purchase the contents of the franchise have opened as of Tuesday, July 21, and will end on August 5 at 12 noon.
The auction includes the contents of 50 fully fitted stores as well as food preparation factories, all of which are located throughout the nine provinces of South Africa.
However, the auction will not be held in a conventional way; rather, bidders will make their offers online. The joint provisional liquidators of Taste Holdings will then review the bids and declare the winning bidder.
According to Andrew Dix-Peek of Park Village Auctions (PVA), all the contents of each pizza outlet are to be sold complete or in a combination of lots.
The three preparation factories that are located in Gauteng and Western Cape provinces are also to be sold in lots or in set combinations.
“The stores – fully equipped – stand ready to trade, allowing an investor to ‘hit the ground running’ in the current economic climate where food for delivery or collection currently reigns over sit-down meals,” said Dix-Peek in a statement on Tuesday.
According to a recent BusinessLive article, CEO of CNA, Benjamin Trisk, “only expects a recovery for the stationery business when back-to-school shopping starts in 2021”.
Edcon bought CNA for R141-million in 2002; it sold it for R1 to Astoria Investments in February.
Due to the Covid-19 pandemic and the five-week nationwide lockdown, consumer spend is under pressure on the back of a weak economy and a rise in retrenchments.
Growing digital platforms are selling competing products, often at better prices.
Trisk believes an improvement in CNA sales would come when consumers returned to shops. Foot traffic at the larger malls remains down, though some mall owners say while shopping fewer times a month, customers are buying more each time.
Trisk has reiterated his plans to revive CNA by:
- Improving the retailer’s book selection and adding more local African literature and books in local languages
- Improving the signage, curation and display in-store
- Cutting CNA product lines
- Removing chocolates, snacks, and tech products including laptops, cellphones and chargers