Company news in brief

SA suspends Land Bank as collateralSouth Africa's central bank has temporarily prohibited the use of debt issued by the Land Bank as collateral after the state agricultural lender was downgraded deeper into junk status and missed US$2.7 billion in loan repayments.The South African Reserve Bank's (SARB) decision will put additional pressure on the banking system, especially commercial and investment banks and institutional investors, which are already starved of the debt instruments necessary to access overnight cash to fund their daily operations.The Land Bank had its credit rating cut to B1 from Ba2 by Moody's in January, while Fitch has also warned of downgrades, and the lender defaulted on the loans totalling R50 billion in late April, citing a "liquidity shortfall"."In light of recent developments surrounding the Land Bank, including the downgrade of the rating and the subsequent debt default, the SARB has taken a decision to temporarily suspend Land Bank bills as eligible collateral in its repo operations," the central bank said late on Friday.Since the novel coronavirus outbreak prompted a national lockdown to limit its spread in March, local capital markets have suffered a severe lack of liquidity as investors rushed to sell emerging market assets. – Nampa/ReutersCourt halts layoffs at SAASouth Africa's Labour Court ordered a halt to layoffs at ailing South African Airways (SAA) on Friday, siding with two trade unions who had argued that the airline's administrators had acted unfairly.The decision throws efforts to rescue SAA into greater disarray after the administrators said the airline had run out of cash and the minister responsible for SAA criticised their efforts to rescue the company.The Labour Court sided with the unions, ruling that the layoff notices were "procedurally unfair" without the rescue plan having been published and ordering the administrators to withdraw the notices.Administrators are still permitted to offer voluntary severance packages and employees can accept them, the court said.The administrators, who had suspended a deadline for staff to agree to layoff terms while the court made its decision, said they were considering their next steps. – Nampa/ReutersPhumelela Gaming enters business rescueSouth Africa's Phumelela Gaming and Leisure on Friday joined a slew of distressed firms to file for business rescue - a local form of bankruptcy protection - after a nationwide lockdown suspended activities in the horse racing industry.Phumelela, of which former Steinhoff International CEO Markus Jooste was a director and among its largest shareholders, has not been able to stage race meetings since the end of March due to the lockdown.This has hurt its revenue from racing and betting, the company said in statement.Most of the restrictions on leisure, entertainment or anything that requires mass gathering are still in place under a partial lifting of lockdown that was put in place from May 1.National Horseracing Authority (NHA) CEO, Vee Moodley, said on Thursday the industry, "which is on the verge of collapse", is asking the government to give it permission to resume controlled closed horse racing during level 4 lockdown restriction in order to save the majority of the 60 000 jobs. – Nampa/ReutersArcelorMittal flags lower profitsArcelorMittal, the world's largest steelmaker, forecast its steel shipments would fall by up to a third in the second quarter, leading to sharply lower profits as coronavirus restrictions hit demand.The company said it had suspended dividend payments until further notice and was cutting planned investment this year by a quarter, but chief financial officer Aditya Mittal said that while there was much uncertainty, the second quarter could be the trough. Lockdowns were easing in Europe, India and some US states, with automakers restarting production, while in China demand had increased significantly, he said.ArcelorMittal said that as the full impact of the pandemic was "highly uncertain" and varies from country to country, the group was withdrawing its guidance for global steel consumption.The company said its core profit (earnings before interest, tax, depreciation and amortisation) in the second quarter would be US$400 million-US$600 million. In the second quarter of last year it was US$1.56 billion. – Nampa/ReutersAB InBev sees worse aheadAnheuser-Busch InBev, the world's largest beer maker, forecast a "materially worse" second quarter as coronavirus restrictions curb drinking across the globe, although China was showing early signs of recovery.The brewer of Budweiser, Corona and Stella Artois sold 9.3% less beer and other drink than a year ago in the first three months of 2020, but this decline worsened to about a third in April as bars and restaurants closed and some production halted.The Belgium-based beer maker did say, however, there were early signs of recovery in China and South Korea as restaurants, and to a lesser extent clubs, began reopening from mid-March.The company's drinks volumes in China were down 46.5% in January-March, but only 17% lower in April.AB InBev has already scrapped its guidance for 2020 due to the Covid-19 pandemic and proposed halving its final 2019 dividend, along with taking other cost-saving measures. – Nampa/Reuters

Company news in brief

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Namibian Sun 2025-11-05

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Company news in brief

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Namibian Sun 2025-11-05

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