Top deals making headlines this week

In focus this week: Absa, IHS Holdings, Steinhoff International, Ascendis Health and more.

Absa

South Africa-based Absa Bank has sold its stake in the Edcon store card portfolio to microlender RCS Group, a subsidiary of BNP Paribas Personal Finance.

No amount was mentioned in a statement released on Monday, but RCS said it also struck a deal with Edcon to sell its customers credit cards, store cards and personal loans. Edgars, Jet and CNA are part of the Edcon group.

RCS said that it had entered into commercial agreements with Edcon, inclusive of credit cards, store cards and personal loans.

RCS said the transaction purchase consideration would be settled by a combination of internal cash resources and funding to be provided by Rand Merchant Bank, a division of FirstRand Bank and The Standard Bank of South Africa. Read more.

Steinhoff International

Steinhoff International is considering the sale of about a quarter of Pepco Group through an initial public offering that could value the European retailer at more than €4 billion, according to a report by Bloomberg. 

The listing could take place in the first half of 2020, sources told Bloomberg but asked not to be identified as the move hasn’t been announced. 

JPMorgan Chase has been hired as one of the book runners, three of the people said, while Goldman Sachs has also been appointed, one of them said.

The sale of shares in Pepco would represent the latest in a string of asset sales for Steinhoff, which narrowly avoided collapse following an accounting crisis in late 2017. The South Africa owner of chains such as Mattress Firm in the US has been realising funds to shore up its balance sheet and negotiated a debt restructuring with lenders earlier this year.

IHS Holdings

IHS Holdings, Africa’s largest operator of wireless towers, is reviving plans for an initial public offering (IPO) that could take place in 2020, according to a Bloomberg report. 

The company’s advisers are resuming preparations for an IPO and are considering seeking a valuation of about $8 billion, according to sources that informed Bloomberg. The company is weighing New York or London as listing venues, the people said. IHS scrapped plans for a US share sale in 2018 due to uncertainty around a presidential vote in Nigeria, its main market. Read more here.

Investec Australia Property Fund 

Investec Australia Property Fund, which recently listed on the Australian Securities Exchange (ASX), said on Wednesday the financial boost from that listing meant it was now well positioned to make further acquisitions.

Fund CEO Graeme Katz said the A$161 million  (R1.6 billion) raised during listing was used to address its debt, with its gearing ratio below its own target. The fund was seeking to take advantage of healthy economic growth in major Australian metropolitan areas.

“Our portfolio is in good shape on the ground, we have 99.9 percent occupancy,” said Graeme. “Our low gearing gives us further opportunity to add value to our portfolio.” Read more here.

Ascendis Health

Health and wellness firm Ascendis Health said it is urgently pursuing the sale of additional business units after suffering writedowns that are more than twice its market capitalisation of R1.8 billion.

The company swung into a normalised loss after tax of R459 million in its year to end-June, with the debt-laden company saying it may need to borrow further to retain its going-concern status. At the end of the period, the company’s current liabilities of R8.6 billion exceeded its current assets of R8.2 billion. Read more here.

Prosus

Prosus's venture investing arm and its payments and fintech business PayU have announced two investments in India, increasing the company’s portfolio in what it referred to as a "high-potential market". Prosus is a Naspers spinoff. 

Prosus Ventures ploughed $40 million (R599 million) into ElasticRun, a virtual logistic entity which delivers consumer products, and PayU injected $11 million (R164 million) into consumer wealthtech company Fisdom, it was announced on Wednesday. According to the company, the move demonstrates its commitment to “investing towards and building [a] broader fintech ecosystem in India around core payments and lending businesses”. Read more here

MAS Real Estate

JSE-listed real estate company MAS Real Estate said on Monday that some shareholders have already said they will support a proposed takeover of its joint venture with Prime Kapital (PK).

MAS is seeking to bolster its operations in Eastern and Central Europe, with the company  recently announcing that it has acquired PK’s management platform.  MAS said on Monday that property group Attacq, which holds 22.84 percent of its shares, and Argosy, which holds 8.52 percent, have confirmed their support for the transaction.

Attacq representing almost a third of MAS’ shares in issue. Read more here

Fairvest

South Africa-focused real estate Fairvest Property Holdings has become the latest company to agree for its shares to be traded on A2X Exchange in South Africa. Fairvest has been approved for a secondary listing on A2X and is set to list on October 31. 

The real estate company, with a market capitalisation of R2 billion, is predominately focused on the retail sector, weighted toward non-metropolitan shopping centres servicing the lower income nodes. Read more here