Top deals making headlines this week

In focus this week: Aspen Pharmacare, Sasol, RDI Reit, Naspers and more. 

Aspen Pharmacare Holdings

Aspen Pharmacare Holdings has agreed to a partnership with India’s Laurus Labs to boost supply of active pharmaceutical ingredients that will help reduce the cost of HIV drugs. The deal was first reported by South African newspaper Business Day. 

The deal with Laurus, which is one of the world’s largest suppliers of active pharmaceutical ingredients (APIs), which are used for making HIV/Aids drugs, is expected to give the South African government access to competitively priced APIs, Aspen senior executive Stavros Nicolaou told Business Day. According to Business Day, Laurus has acquired Aspen’s South African subsidiary Phekolong Pharmaceuticals, which paves the way for the Indian pharmaceutical company to gain a trading entity in South Africa. 

The deal is expected to put Aspen in a better position to bid for government contracts as the country plans to scale up treatment to six million people, Stavros said. Read more here

Sasol

Sasol is planning to sell its South Africa coal-mining business, according to a Bloomberg report.

The company will begin a formal sales process in the coming weeks, people familiar with the matter told Bloomberg. 

The mining business had turnover of R20 billion in the 2018 financial year, according to the company’s financial report, mostly from internal sales to Sasol’s other operations. The company is the world’s biggest manufacturer of fuel from coal, an energy-intensive process. Sasol’s coal mines produce about 40-million tonnes of coal a year, almost entirely for use in its own operations, according to its website.

The company would plan to sign a coal-purchase agreement with whoever buys the asset, said one of the people. Read more here

RDI Reit

RDI Reit, a real estate company listed on the Johannesburg Stock Exchange, said it was making progress in offloading its German assets after selling its Bahnhof Center in Hamburg for €91 million (about R1.47 billion). 

RDI, formerly known as Redefine International, said Wednesday that it has agreed to sell its Bahnhof Altona Center in Hamburg, Germany to Volksbank eG Braunschweig Wolfsburg. The retail property is a 15,000 square metre retail centre, comprising 22 stores across three levels and a 496 space multi-storey car park.

The sale of the retail property, which expected to be completed by the end of 2019, comes as the company shifts its focus to the UK. Read more here

Naspers

South African investment company Naspers said on Monday it holds a 74 percent stake in Prosus, the Dutch holding firm it has spun off to run its global consumer internet investments, including a 31 percent stake in China’s Tencent.

The figures published in Johannesburg following Prosus’s Initial Public Offering (IPO) in Amsterdam last week showed a 1.3 percent increase in the number of Naspers shares outstanding, as a handful of shareholders elected to receive additional Naspers shares rather than Prosus shares in the IPO. An overwhelming majority of Naspers shareholders chose to get shares in its new tech company Prosus, rather than more Naspers shares. 

Investors representing 96.3 percent of Naspers shares went for the default option: They received one Prosus share for every Naspers N share they held. Alternatively, they could have opted to get 0.36986 new Naspers shares for every Naspers share they owned. Read more here.

Exxaro 

South Africa-based diversified resources company Exxaro Resources said it has concluded an agreement with Khopoli Investments, a subsidiary of Tata Power Company, to acquire Khopoli’s 50 percent shareholding in independent power producer Cennergi for R1.55 billion.

The deal will give Exxaro 100 percent ownership of Cennergi and is in line with Exxaro's ambitions of growing its presence in the energy sector. Cennergi owns the 134 MW Amakhala Emoyeni Wind Farm and the 95 MW Tsitsikamma Community Wind Farm in the Eastern Cape. Read more here.

Blue Label 

The Johannesburg Stock Exchange (JSE) said South Africa-based technology company Blue Label Telecoms is facing suspension from the bourse for failing to publish its financial results.

“The company’s listing on the JSE trading system has been annotated with a ‘RE’ to indicate that it has failed to submit its provisional report timeously and that the listing of this company’s securities is under threat of suspension and possible removal,” Blue Label said in a statement.  The JSE said on Tuesday Blue Label had until the end of the September to release its results for the year ended-May.

Blue Label said it in August that it was in the process of determining the value of its investment in Cell C, of which it holds 45 percent, and that its results would be released on September 26. Read more here

Cell C

Majority shareholders of South Africa’s third-largest wireless carrier, Cell C, have both cut the fair value of the wireless carrier to zero.Technology firms Blue Label Telecoms and Net1 are majority shareholders of Cell with the firms owning 45 percent and 15 percent respectively.

“Fair value” is an accounting term that reflects the estimated price a company could be sold for, given its assets and liabilities. Cell C, which has struggled to make consistent profits since it became South Africa’s third mobile operator in 2001, is grappling with a hefty debt burden.

In August S&P Global Ratings downgraded Cell C’s debt to D, or “default,” its lowest-possible junk rating. This came after the cell phone operator “failed to make interest payments on certain bilateral loan facilities”. Cell C is currently engaged in a restructuring plan with its stakeholders, and Net1 said it is supportive of the process and has acknowledged that there have been “positive developments” since the end of June. Read more here