Top deals making headlines this week

In focus this week: Distell, Exxaro, Sappi, MAS Real Estate and more.

Distell

Distell, a South Africa-based alcoholic beverages company, said it planned to put more struggling wine farms on sale in a bid to improve financial performance, according to a Business Day article.

The looming sale of Alto and Plaisir de Merle estates is part of the company’s ongoing strategy to sell wine farms to simplify its structure.   The company said in a statement on Thursday that its board decided to sell the Alto and Plaisir de Merle estates along with brands, trademarks and stock. It said that move was in line with Distell’s strategy to enhance returns and reduce complexity.  

The company has not divulged the value of the wine farms. In the six months ended December 31 2019, Distell’s wine sales came under pressure from huge discounts by beer competitors, according to CEO Richard Rushton. The wine business reported a 7 percent decline in interim revenues to R3.7 billion.

Sappi

Sappi, the world’s largest manufacturer of dissolving wood pulp, has halted its R2.7 billion expansion project at its Saiccor Mill in KwaZulu-Natal because of the coronavirus outbreak.

Sappi said the project was 65 percent complete and “materially on track”. The project was undergoing a controlled shutdown, the company said, adding that the project would restart based on government guidance. South Africa will be on nationwide lockdown from Friday until mid-April as part of efforts to curb local transmission of the virus.  Read more here

Exxaro

South Africa’s largest coal producer has been approved for a secondary listing on the A2X from 2 April, bringing the number of securities available for trade on the exchange to 36 with a combined market capitalisation of more than R1.5-trillion.

Exxaro will be the third mining company to list on the A2X, joining African Rainbow Minerals and Tharisa.

A2X provides a secondary listing venue for companies and began trading in October 2017. Exxaro CEO Mxolisi Mgojo said the reduced trading costs on the A2X would lead to savings for investors. Read more here.

MAS Real Estate

MAS Real Estate, which owns shopping centres in Central and East European countries like Romania, Bulgaria and Poland, will delist from the Luxembourg Stock Exchange in June where it is little traded.

MAS, which will retain its primary listing on the Johannesburg Stock Exchange, had said earlier in March its listing in Luxembourg had created “unnecessary bureaucracy and costs.” Read more here.

RDI

London and Johannesburg Stock Exchange-listed landlord RDI, which is selling off its assets in Germany to focus on the UK, said on Thursday it had sold three warehouses in Germany for €34.2 million (about R650 million), having now moved to dispose of more than half that portfolio.

The sale of the three warehouses represents a 3.5 percent discount to their market values as of August 2019; however, given the transaction structure, the purchaser has taken on the inherent tax liabilities associated with the portfolio, the group said. Read more here.

Chevron

Chevron cut its capital spending budget by $4 billon on Tuesday, leading a wave of cost-cutting announcements across the oil and gas industry as it reels from declining demand in the face of the coronavirus pandemic and a dramatic slide in prices.

Crude oil prices have crashed by 60 percent since January as Saudi Arabia and Russia pump full-bore to grab share in a dwindling market, and petrol and jet fuel use has slumped. Demand worldwide is expected to fall by more than 12-million barrels per day, more than 10 percent of daily demand.

“This is as unprecedented an oil price environment as I can recall seeing,” Chevron CEO Michael Wirth said in an Reuters interview. Read more here.