Company news in brief
22 May 2020 | Business
South Africa's Land Bank told lawmakers on Wednesday it was negotiating with a consortium of lenders to try to restructure its debt facilities after it defaulted on R50 billion of loans in April.
The Land and Agricultural Development Bank of South Africa (Land Bank), the country's largest agricultural-focussed lender, was downgraded by Moody's in January and last month missed loans repayments, leading to defaults on its credit facilities and sparking fears about its ability to stay afloat.
Around R5.7 billion of its debt is guaranteed by the government, and the National Treasury has said it cannot afford to recapitalise the bank as its fights the economic fallout of the coronavirus pandemic.
Land Bank chairman Arthur Moloto told parliament the state-owned lender had every intention of honouring its financial obligations to service interest on its debt, which it has struggled to do due what it called "liquidity constraints".
"We are at this stage engaging with a consortium of bond lenders, composed of commercial banks and institutional investors. The negotiations are at a very sensitive stage," Moloto said. – Nampa/Reuters
Denel can't pay May salaries
South African state defence firm Denel said on Tuesday it could not pay salaries for May and wages for June and July were at risk, highlighting the gravity of its financial position.
Despite a slight easing of South Africa's lockdown restrictions this month, Denel is running a reduced operation.
"Denel is not in a position to pay salaries for May. Also the June and July salaries are in serious jeopardy," Denel said in a message to employees seen by Reuters.
Denel chief executive Danie du Toit said in a separate statement the company was in ongoing conversations with the government "to find solutions to the current crisis".
Denel, which makes military hardware for the armed forces in South Africa and around the world, is awaiting a R576 million bailout announced in a budget speech in February, after receiving a R1.8 billion bailout last year. – Nampa/Reuters
'Reasonable prospects' Comair can be saved
Administrators in charge of South African aviation company Comair believe there are "reasonable prospects" of saving the company, it said on Tuesday, after filing for a form of bankruptcy protection earlier this month.
Comair has assets of R7.4 billion on its balance sheet compared to R5.5 billion of liabilities and is not factually insolvent, the company said in a statement.
The administrators will probably publish a business rescue plan on June 9. – Nampa/Reuters
Lafarge Africa halts capex
Lafarge Africa will freeze capital expenditure this year, chief executive Khaled El Dokani said on Tuesday after the cement company forecast a drop in second-quarter sales as the coronavirus pandemic hits demand.
Major infrastructure projects have been put on hold, El Dokani said, citing Nigeria's lower oil revenue because of a slump in oil prices, with the company's sales volumes also hit by the country's coronavirus lockdown.
The Nigerian unit of Franco-Swiss building materials group LafargeHolcim did not provide a sales figure for the second quarter. Sales for the corresponding period last year were 81.78 billion naira (US$227.2 million).
Capital expenditure in the first three months of the year stood at 2.9 billion naira, down from 6.9 billion naira in the same period last year.
At the start of the year, the company had forecast growth in its main Nigerian market as well as targeted exports.
Cement volumes in the first-quarter rose 8% and overall sales of 63.7 billion naira were up 9.8%, El Dokani said, helped by a 2% price rise that had taken effect in December. – Nampa/Reuters
Angola picks Africell as telecoms operator
Angola on Tuesday awarded the licence for its fourth telecoms network to Lebanese group Africell, as Sub-Saharan Africa's second-biggest oil producer opens other economic sectors to foreign competition.
Africell is already present in four African countries - Gambia, Democratic Republic of Congo, Sierra Leone and Uganda.
Angola had awarded the licence last year to a domestic start-up called Telstar but president João Lourenço annulled the decision, saying the company failed to meet the bidding requirements.
Angola's mobile phone market, with almost 14 million users, is currently dominated by two privately held companies - Unitel and Movicel. A third operator, Angola Telecom, offers fixed and internet access but no mobile services.
Isabel dos Santos, daughter of former president Jose Eduardo dos Santos, owns half of Unitel's share capital. She was recently indicted for a host of high-level financial crimes. – Nampa/Reuters
Zambia partners with Array Metals
Zambia's state mining investment company ZCCM Investments Holdings (ZCCM-IH) has entered into a joint venture with mining services firm Array Metals to process production from a gold deposit, the company said in a statement on Wednesday.
Africa's second-largest copper producer, Zambia is trying to diversify its revenue base, and aims to produce 40 000 kg of gold in 2020 from primary and secondary sources including gold bought from small-scale miners.
ZCCM-IH subsidiary Consolidated Gold Company Zambia (CGCZ) will hold 65% of the project processing gold in Mumbwa, west of Lusaka, with Array Metals Zambia holding 35%.
The project aims to produce about 3 tonnes of gold within the next two years, worth approximately US$150 million at current prices, the statement said. – Nampa/AFP