| Wednesday 12 January 2022 Good morning Voornaam,
Glencore has completed its acquisition of Anglo American's and BHP's stakes in Colombian coal mine Cerrejon. Each of those mining giants sold a 33.3% stake to Glencore, which takes Glencore to full ownership of the mine. The original purchase price was USD558 million and a further USD101 million will be paid by Glencore based on the strong performance of the asset during 2021.
Moving from one end of the ESG spectrum to the other, Mondi has committed to net-zero carbon emissions by 2050. Don't make the mistake of thinking that this is a purely altruistic endeavour - Mondi has demonstrated an ability to derive financial benefits from such activities, such as the raising of an ESG-linked EUR750 million revolving credit facility in mid-2021. As more environmental goals are reached, it is likely that further funding can be raised at attractive rates.
Mahube Infrastructure is a R330 mil lion market cap company that has been trading under a cautionary announcement for the longest time. The company is in the process of "exploring its options to restructure its business" which could mean anything. Someone ran out of patience yesterday, as the illiquid share traded 16% lower.
Tiger Brands doesn't often have good news to share, so the improvement of its B-BBEE rating from Level 3 to Level 2 was worth sharing. Practically, I'm not sure that it makes a material difference to an FMCG business. Most people don't ask for a B-BBEE certificate when choosing which baked beans to buy. In my experience, food safety matters more...
Industrials REIT has released an announcement detailing the tax and other impacts of the decision to receive a cash dividend or a scrip dividend (cash in lieu of shares). If you are a shareholder in this business, I suggest that you give the announcement a careful read. Companies lik e to offer a scrip dividend alternative as it helps preserve cash. This is especially true for REITs, as they can use that cash to either reduce debt (a common theme recently) or make new acquisitions (what they should've ideally been doing while the market has been depressed).
In an example of playing musical islands, Lighthouse Capital has moved its country of domicile from Mauritius to Malta and will change its name to Lighthouse Properties. This decision will have been driven by a combination of legal and tax considerations, based on the company's investment strategy and target jurisdictions.
The resignation of Sasfin's financial director was announced yesterday and the share price traded 12.67% higher on the day. It is an illiquid stock and so these types of jumps can simply reflect the bid-offer spread. It may well be unfortunate timing and a coincidence that it seemed to be a reaction to the news of the resignati on!
An executive change that the market probably did react to was the news of Mteto Nyati stepping down as CEO of Altron after a five-year term. He oversaw a substantial increase in shareholder value and will be stepping down entirely from the board. No successor has been announced at the stage and the share price closed 2.95% lower.
MC Mining Limited acquired the Makhado hard coking and thermal coal project in January 2019. The balance of the purchase price of R35 million plus interest was payable within three years - in other words, now! The company can only pay R6 million of that amount and needs to pay the rest by the end of February. The interest rate has now increased to 15.2%. MC Mining is also negotiating with the IDC for an extension of the repayment date for an existing R160 million facility and the terminal drawdown date for an additional R245 million facility. The IDC has yet to respond.
Today's feature articles are on Sea Harvest's acquisition of a Western Australian fishing business, Alphamin's record production volumes and Orion Mineral's incredibly detailed and mostly-impossible-to-understand announcement about its drilling operations at the Okiep copper project.
That's it from me this morning. Have a good day!
The Finance Ghost
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