Top deals making headlines this week

In focus this week: RMB Holdings, Steinhoff International, Cell C, Barloworld and more. 

RMB Holdings 

South Africa-based financial services group RMB Holdings (RMH), has announced that it will be distributing its R130 billion stake in FirstRand to shareholders as part of a restructuring process. 

RMH owns a 34 percent stake in FirstRand, the parent company of First National Bank. The move will see FirstRand, which runs South Africa‘s largest retail bank, split from its parent and original founders, prominent businessmen who via firms like RMH have played a role in the rise of a number of now major companies, many in financial services.

In an update to shareholders on Tuesday, RMH said the decision follows a review of its investment portfolio. Its board intends to distribute the FirstRand shareholding to RMH shareholders and also sell off its property assets. Read more here.

Barloworld 

South Africa-based logistics and fleet management group Barloworld said it will reduce its interest in subsidiary Avis Fleet to 50 percent because of low returns from the vehicle leasing and fleet management company, according to Business Day.The sale of the interest in Avis, for an undisclosed amount, would be finalised in the next 12 months, Barloworld said on Monday.

CEO Dominic Sewela (pictured) said the company will bring in equity partners to take up a 50 percent stake.Barloworld, which has a market capitalisation of R26.3 billion, declined to divulge to Business Day the value of the Avis Fleet business. In the 2018 financial year, Avis Fleet’s revenue was R3.3 billion, while operating profit was R641 million. Read more here

Cell C

After months of negotiations, South Africa-based telecommunications companies Cell C and MTN have finally concluded a roaming agreement. 

Cell C already has access to MTN’s network in areas where it does not have coverage, after recently moving away from Vodacom in favour of MTN’s infrastructure. However, in 2018, Cell C and MTN entered into an initial roaming agreement that provided 3G and 4G services in areas outside of the main metros. The expanded roaming agreement extends this coverage and gives nationwide roaming to the benefit of Cell C subscribers.

This roaming agreement will see Cell C’s 4G network coverage extended to 95 percent of the population. Cell C customers will have access to over 12,500 sites, of which 90 percent are LTE enabled. Read more here

Taste Holdings 

South Africa-based Taste Holdings on Tuesday announced it would offload food brands Maxi’s and The Fish & Chip Company as part of its continuing change and new strategic direction. The group said it had entered into an agreement in terms of which the company will dispose of the two food brand franchise businesses.

The company did not disclose the buyer or the price. Taste bought Fish & Chip Company for R66 million in 2012. In April 2005, it acquired Maxi’s.  Taste Holdings recently sold its local Starbucks franchise for R7 ?million to an entity called K2019548958 in a strategic shift away from food brands for the company. Read more here

Life Healthcare

Private hospital group Life Healthcare is exploring an exit from Poland after taking a multi-million rand impairment charge during its financial year to end-September.

In Poland, Life Healthcare owns the Scanmed hospital group and provides diagnostic services through Alliance Medical. The company acquired a majority stake in Scanmed in 2014. Life Healthcare said on Thursday it was exploring strategic options for a potential exit from this market. Regulatory changes in Poland affected minimum employments costs and resulted in an impairment in the value of its Polish investment of R125 million. Read more here

Steinhoff International 

Steinhoff International said on Monday its Australasian subsidiary Greenlit Brands sold its general merchandise division to Allegro Funds, as the South African retailer grapples with the fallout of an accounting scandal worth about $7 billion.

Steinhoff had said in August its only way to survive was to slim down and sell its assets. Steinhoff said the terms of the transaction were confidential. “The sale of Greenlit Brands General Merchandise division is a further step in Steinhoff’s programme of planned divestments,” Louis du Preez, Steinhoff Group CEO said. Read more here.

Tongaat Hulett 

Sugar producer Tongaat Hulett said in a statement released on the Johannesburg Stock Exchange News Service on Tuesday afternoon that it would be disposing of its interest in its Namibian business in a bid to tackle debt.

Tongaat Hulett owns an effective 51 percent beneficial interest in Tongaat Hulett Namibia. The entire sugar packaging and distribution business would be sold to Bokomo Namibia for R220 million. The deal is still subject to certain conditions.Tongaat Hulett's share of the proceeds - or R112.2 million before deductions for taxes and transaction costs - would be used to reduce its debt levels, the statement said. Read more here.