Top deals making headlines this week

In focus this week: Tongaat Hulett, Sasol, Cell C, Investec Property Fund and more.

Sasol

South Africa-based chemical group Sasol is the latest to list on the low-cost A2X Exchange in February, increasing the number of securities available for trade on the exchange to 34.

Sasol, which will list on the A2X on February 3, will retain its listings on the Johannesburg Stock Exchange (JSE) and New York Stock Exchange.

A2X is a licensed stock exchange authorised to provide a secondary listing venue for companies and is regulated by the Financial Sector Conduct Authority of South Africa. A2X is a new entrant in the securities trading market, which was previously monopolised by the JSE.

“Sasol’s decision to list on A2X is part of the company’s commitment to continually find ways to increase value for shareholders as well as provide them with a variety of trading venue options,” said Sasol CFO Paul Victor (pictured). Read more here.

Tongaat Hulett

The Johannesburg Stock Exchange (JSE) has agreed to lift the suspension of trade in Tongaat Hulett’s shares with effect from Monday, 3 February 2020 after a six-month ban.

The embattled sugar producer, which is based in South Africa, asked the JSE to suspend its shares from the main bourse in June 2019 after it uncovered accounting irregularities that resulted in inflated assets and profits.

Its shares were also suspended on the London Stock Exchange. The company asked the JSE in December to postpone lifting the suspension, saying it needed more time to analyse its numbers. On Friday, Tongaat Hulett said the JSE has agreed to lift the suspension “to enable investors to absorb the financial information that is now available” as the troubled sugar producer looks to recover from one of the biggest corporate scandals in South Africa. Read more here.

Cell C

Durban-based Super Rugby franchise, the Sharks, has renewed its major sponsorship deal with South African telecommunications company Cell C. The new deal is effective immediately and will run for the next three years. Cell C has served as the Shark’s main sponsor since January 2014.

The sponsorship renewal comes just a day after news that Cell C defaulted on the payment of interest on a US$184-million (R2.7-billion) loan, which was due in December 2019, along with interest and capital repayments related to bilateral loan facilities with NedbankChina Development Bank, the Development Bank of Southern Africa and the Industrial and Commercial Bank of China. Read more here.

Grit Real Estate

Grit Real Estate, the only pan-African property group listed on the Johannesburg Stock Exchange, has completed its acquisition of the Club Med Cap Skirring, a hotel in Kabrousse, Senegal.

The cost of the deal, first announced in July, has risen almost 4 percent to €16.2 million (R259 million) due to pre-development expenses incurred by Club Med SAS, with Grit planning further redevelopment and renovation at the hotel.

The company expects to begin this work, capped at a cost of €28 million, by the end of the first quarter. Grit already operates in Botswana, Ghana, Kenya, Mauritius, Morocco, Mozambique and Zambia and has a market capitalisation of R5.2 billion. Read more here.

Investec Property Fund 

Investec Property Fund announced on Monday that it plans on selling all its shares in two South African malls, with the aim of investing the proceeds in Europe and the UK. 

This move will see Investec Property Fund decrease its exposure to the volatile South African commercial real estate market, which has been hit by low economic growth and consumer confidence and policy uncertainty. 

By the end of 2019, Investec Property Fund had amassed R2.5 billion worth of assets in developed countries in Europe and about R735 million in a UK fund. It also owned a stake in Investec Australia Property Fund, worth about R1.9 billion. Its South Africa assets were worth R16.7 billion, or 77 percent of its portfolio. Read more here.

Quilter

London-based Quilter, Old Mutual’s former wealth management business, said on Wednesday that stock market gains helped it grow assets under management by 13 percent to £110.4 billion during its year to end-December.

The group’s share price rose by a third in 2019, with CEO Paul Feeney saying it has had annual net client cash inflow of £300 million for the year, excluding Quilter Life Insurance, reflecting a turnaround during the company’s fourth quarter. Quilter listed on the Johannesburg Stock Exchange and the London Stock Exchange in June 2018, and has not escaped the effects of Brexit. Read more here.

Intu Properties

UK mall owner Intu Properties has raised R2.3 billion from the sale of a Spanish shopping centre as it divests from the country in its struggle to survive.

The group is restructuring its balance sheet to lower its crippling debt, which is more than 18-times its market capitalisation. Intu, and its joint venture partner Canada Pension Plan Investment Board, has sold the Asturias shopping centre in Spain to ECE European Prime Shopping Centre Fund II, with Intu’s share of the proceeds amounting to €145 million (R2.3 billion). Read more here.