Top deals making headlines this week

In focus this week: Redefine Properties, AVI, Sun International, South32 and more. 

Redefine Properties

South Africa’s second largest primary listed real estate company Redefine Properties is putting its R4 billion in Australian assets up for sale as it looks to exit the country by 2020, according to a report by Moneyweb.

This was revealed by Redefine CEO Andrew König (pictured) during the group’s 2019 full-year results media briefing in Johannesburg on Monday. The move to recycle its high-value properties in Australia is aimed at strengthening its balance sheet by bringing down debt in the face of challenging conditions in its core home market in South Africa. Read more here.

AVI

South-Africa based consumer goods group AVI, owner of Five Roses, Green Cross and I&J, has sold its 40 percent interest in Australia-based seafood and snack manufacturer Simplot for R633 million. Simplot makes and supplies seafood snacks in Australia and New Zealand.

The group cited as reasons its lack of managerial control in the venture, as well as a desire to exit businesses whose return on capital prospects did not meet its expectations. In its integrated report for the year to end-June 2019, AVI said I&J's joint ventures had yielded equity earnings of R42.2 million, down 25 percent from the prior period. Read more here.

Sun International

The owner of casino and assets across South Africa and Latin America, Sun International, said the merger between its Chile-based gaming business Sun Dreams and Marina del Sol has been put on hold after both parties failed to agree on a memorandum of understanding.Casino and hospitality group Marina del Sol is owned by private equity company Clairvest and Empresas Valmar, a Chilean real estate company.

Sun International owns 64.94 percent of Sun Dreams, while Nueva Inversiones Pacifico Sur Limitada (Pacifico) holds 35.06 percent. Sun International and Pacifico entered into a memorandum of understanding with Clairvest and Empresas Valmar earlier in 2019 that would have paved way for the merger. Read more here

South32

The Australian group South32, which was unbundled from BHP Billiton in 2015, has sold its 92 percent stake in South Africa Energy Coal to a group of local investors. 

South Africa Energy Coal has four coal mines and three processing plants near eMalahleni and Middelburg in Mpumalanga. South32 owns almost 91 percent in SAEC, while a B-BBEE consortium owns the rest. South32 sold its stake to a subsidiary of Seriti, a majority black-owned mining investment firm, and two trusts for employees and communities.

Seriti will make an up-front cash payment of R100 million, and as part of the deal South32 will receive 49 percent of the free cash flow generated by the local coal business until March 2024, with the payment capped at a maximum of R1.5 billion per year. Read more here

MC Mining

MC Mining, which is headed by industry veteran David Brown, said on Tuesday that it had been given the go-ahead for its Generaal coking and thermal coal project in Limpopo.

The Generaal project, together with the Chapudi and Mopane projects, comprise the company’s longer-term Greater Soutpansberg Project (GSP) in the Soutpansberg coalfield. It is the second of the mining rights to be granted.

The mining right is a further step in unlocking value from MC Mining’s significant coking and thermal coal assets, and positions the company, formerly Coal of Africa, to be a potential long-term coal supplier to industrial users both local and offshore, David said in a statement. Read more here.

Calgro M3

South Africa-based housing developer Calgro M3 has been publicly censured by the Johannesburg Stock Exchange (JSE) for failing to alert shareholders regarding dealings with its directors.

Calgro announced in September 2018 that it had cancelled the executive share incentive scheme, which also entailed it buying back shares originally issued to directors. The company had failed to get shareholder approval, and failed to alert shareholders via the JSE’s news service (Sens), the JSE said in a statement. Calgro could be fined up to R7.5 million per transgression, although it may appeal. Read more here

RECM & Calibre

RECM & Calibre (RAC), the South Africa-based investment house headed by asset managers Piet Viljoen and Jan van Niekerk (pictured), has taken a controlling stake in Mauritius-based investment firm Astoria.

RAC’s portfolio of investments include stakes in Trans Hex GroupUnicorn Capital PartnersOutdoor Investment Holdings, private education company ISA Carstens and Conduit Capital.The company has upped its stake from 29.4 percent to 78.45 percent, and is now obliged to make a takeover offer of the rest of the shares. Read more here.

Taste Holdings 

Taste Holdings has given up on Starbucks in South Africa, saying it plans to sell the franchise rights it owns to manage and roll out the coffee conglomerate’s chains across the country for R7-million. 

The announcement by Taste on Friday doesn’t mean that Starbucks will shut its 13 stores in South Africa, a market in which the coffee conglomerate chose in 2016 as part of its expansion plan in sub-Saharan Africa. It means that Taste will sell the franchise rights to open Starbucks stores in South Africa to another company. Read more here