Top deals making headlines this week

In focus this week: Liquid Telecom, Clover, Brait, ArcelorMittal South Africa, Blue Label and more. 

Liquid Telecom

The Public Investment Corporation is poised is set to take a stake in Liquid Telecom if Africa’s biggest fibre company goes ahead with a planned initial public offering (IPO), according to a report by Bloomberg. 

The PIC, which manages the pension funds of South Africa’s government workers, agreed to set aside funds to guarantee a $375 million (R5.6 billion) loan to Liquid parent Econet Global from Deutsche Bank, three sources told Bloomberg. The money manager would then buy stock in Liquid when it lists, at a discount to the offer price, and that money will be used to repay Deutsche, they said, asking not to be identified as the information is not public. Read more here

Clover 

The R4.8 billion acquisition of South Africa-based foods and beverages group Clover Industries by a consortium called Milco has been approved by the competition authority. 

The Competiton Tribunal announced on Wednesday that it has approved the merger involving Milco SA and Clover subject to a range of employment, local procurement of bulk juice concentrate, and information sharing conditions. The tribunal has put a three-year moratorium on retrenching 516 workers, it said on Wednesday, noting that that number had also been subsequently lowered to 277 planned job losses. Read more here

Brait

South Africa-based investment holding company Brait said on Monday that it is in talks with its major shareholder, Titan, as it plans to materially cut its debt, through raising equity and recapitalisation, among other ways.

“Careful consideration has been given to the cost structure of Brait and in consultation with Brait’s Corporate Advisors, initiatives are at an advanced stage to significantly reduce the net operating costs of Brait,” it said. Billionaire Christo Wiese’s firm, Titan — which controls 46 percent of the company — considers Brait a strategic long-term investment and intends to remain a significant shareholder, Brait said. Read more here

Stenprop

UK-focused real estate investor Stenprop said it has completed the acquisition of 100 industrial units in five separate transactions for a combined £16.7 million, with the company taking advantage of low asset prices as a result of Brexit uncertainty.

Stenprop is focusing on UK multi-let industrial properties and is listed on the Johannesburg Stock Exchange. The company tends to rent space to entrepreneurial tenants and small manufacturing and services businesses.

The acquisitions included the Hillfoot industrial estate in Sheffield, Armthorpe and Trident estates in Middlesbrough,which were acquired from Westbrook Partners for £10.2 million, reflecting a net initial yield of 6 percent for the 81 units. The acquisition also includes individual units at the Parkway business centre in Deeside, Forth industrial estate in Edinburgh and the Holbrook enterprise park, also in Sheffield. These units were purchased for £4.2 million, at a yield of 6.6 percent. Read more here.

Outsurance

Outsurance will sell its New Zealand insurance business, Youi New Zealand, to Tower Insurance, that country's third largest general insurer.  

“The sale provides an opportunity for Youi to unlock value on favourable terms and, going forward, will allow the Youi group to focus on its Australian business where the greater scale and diversity of the market offers more growth opportunities for a challenger brand like Youi.”

Outsurance launched Youi Australia, a short-term insurer, in 2008. The sale price range is between NZ$10 million (R94 million) and NZ$13m (R122 million). Read more here

Omnia

South Africa-based chemicals and fertiliser maker Omnia has announced that it had raised R2 billion via a rights offer, which would be used to repay its debt.

The heavily indebted JSE-listed diversified chemicals group said it had completed the rights offer of 100 million new ordinary Omnia shares at a subscription price of R20 per rights offer share. The rights offer was fully underwritten by a number of  asset management companies whose clients were shareholders of Omnia including Allan GrayCoronationFoordKagisoOld Mutual and Prudential. Omnia in June secured a R6.8 billion bridge-loan, while net interest-bearing borrowings was at R4.4 billion at the end of March. Read more here

ArcelorMittal South Africa 

ArcelorMittal’s South Africa unit said on Wednesday it may close some operations pending a review as it looks to strengthen its long-term sustainability and battle cheap imports, rising costs and a flagging local economy.

The company, majority-owned by ArcelorMittal, said its review would exclude its coke operations and the Highveld Structural Mill but would include some of its major operating sites, individual plants and production areas. ArcelorMittal South Africa, which has for some time complained about cheap imports eating into its business, has also been hit by subdued investment and infrastructure spending in the country, as well as a weak South African economy. Read more here

Blue Label

South Africa-based technology company, Blue Label Telecoms, said on Wednesday that DNI 4PL would be buying its interests in Blue Label Mobile as well as taking over 3G Mobile from its subsidiary The Prepaid Company. 

The sales are subject to various suspensive conditions, and intended to “ensure a more liquid balance sheet”, according to Blue Label.

“Over the past two years, significant investments were made, necessitating an increase in interest-bearing debt in order to ensure that the group’s working capital requirements continued to be met. Accordingly, the Blue Label board of directors have made a decision to deleverage the business in order to ensure a more robust and liquid balance sheet going forward,” the company said in a statement.  Read more here