Company news in brief
05 May 2020 | Business
South African Airways could start shedding its 5 000 staff from May 12 if unions and workers do not accept a proposed severance deal, administrators trying to rescue the airline said on Sunday.
SAA entered a local form of bankruptcy protection in December in a last ditch effort to either save or liquidate the national carrier, which has not turned a profit since 2011.
Rescue specialists Les Matuson and Siviwe Dongwana last month proposed severance packages for all staff, after the government said SAA would receive no more cash.
But the National Union of Metalworkers of South Africa and the South African Cabin Crew Association, went to a labour court to try to block the cuts.
The rescue specialists added that they would oppose the application by the two unions in court because "if successful, it would further contribute to the financial and other challenges that SAA is facing". – Nampa/Reuters
Glencore's Zambian mine resumes
Glencore's Zambian subsidiary Mopani Copper Mines (MCM) will resume mining for 90 days, but still expects to go ahead with its initial plan to place operations on hold, the local firm said on Sunday.
Glencore's original announcement that it planned to put MCM under "care and maintenance" due to the coronavirus crisis and other issues sparked a backlash from Zambia's government, which threatened to revoke its licences for not giving enough notice.
Mopani said in a statement that constructive discussions had taken place with the Zambian government.
"During the 90-day period, Mopani will continue to engage with the government on potential solutions to its current challenges," the statement said.
Mines minister Richard Musukwa said the government would continue dialogue with Mopani to understand what it was facing and seek a sustainable solution going forward. – Nampa/Reuters
Corona maker keen on marijuana
Corona beer maker Constellation Brands Inc's subsidiary has exercised warrants to buy shares of Canopy Growth Corp, increasing its stake to 38.6% in the Canadian marijuana producer.
The warrants, which were originally issued on Nov. 2, 2017, were exercised at C$12.9783 per common share for a total of about C$245 million (US$174 million), the companies said on Friday.
Constellation now indirectly holds a total of 142.25 million common shares of Canopy, 139.75 million warrants to purchase common shares and C$200 million principal amount of senior notes.
"While global legalisation of cannabis is still in its infancy, we continue to believe the long-term opportunity in this evolving market is substantial," Constellation chief executive officer Bill Newlands said.
Constellation had said earlier in the year that it does not plan to make any additional cash contributions to Canopy beyond the exercise of the warrants. The company was one of the first major alcohol producers to enter the growing cannabis industry when it took the stake in Canopy in 2017.
It has since had to record charges in various quarters due to the decrease in the fair value of its over US$4 billion investment as Canadian weed producers struggle to turn a profit due to lower-than-expected demand, while expansions hit sales and lift costs. – Nampa/Reuters
Exxon posts first loss in 30 years
Exxon Mobil Corp on Friday posted its first quarterly loss in three decades on plunging oil demand and collapsing prices, reporting a US$610 million quarterly deficit after a nearly US$3 billion inventory writedown.
Exxon posted a loss of US$610 million, or 14 US cents per share, in the quarter, compared with a profit of US$2.35 billion, or 55 US cents per share, a year earlier.
Global fuel demand has tumbled by a third on coronavirus-related lockdowns and business shutdowns. Oil giants largely have reported losses on weaker margins and writedowns from an oil glut that has sent prices to historic lows.
All of Exxon's businesses posted lower year-over-year profits or wider losses on declining prices and margins.
Exxon has cut this year's project spending by US$10 billion and expects to reduce oil and gas output by 400 000 barrel per day in line with rivals. Chevron also plans to cut as much as 300 000 bpd this month and up to 400 000 in June. – Nampa/Reuters
Petra withholds interest payment
Africa-focussed miner Petra Diamonds said on Friday it would hold off on making an interest payment on bonds due on May 1 and make use of a 30-day grace period to find a resolution with creditors that allows it to draw down other new borrowing.
The company has been in talks with its creditors to shore up its finances as the coronavirus outbreak forced it to scale back operations and hammered diamond prices.
Petra said on Friday it should shortly be able to draw R400 million (US$21.41 million) of a R1 billion revolving credit facility it was negotiating with its South African banking backers.
However, the facility is subject to the company not making the interest payments, Petra said.
Interest payments, payable semi-annually, are needed on May 1 and Nov. 1 for the company's outstanding US$650 million, 7.25% Senior Secured Second Lien Notes due 2022. – Nampa/Reuters