| Monday 11 April 2022 Good morning Voornaam,
enX Group shareholders should read the offer circular dealing with the R5.60 per share mandatory offer from MCC Contracts and African Phoenix Investments (acting in concert). The share price is R7.90 and the BDO independent expert opinion is that the offer is unfair and unreasonable to shareholders, with a suggested valuation range of R12.37 to R12.80. This puts the current price at a substantial discount to BDO's view of the fair value and the offer price is even lower. The independent board has adopted BDO's view and so it will not be recommending the offer to shareholders. This shows that the concert parties picked the shares up at a bargain to move through the mandatory offer threshold. The share price is down 4.8% this year.
South32 is raising debt funding through the issuance of senior unsecured notes due in 2032. The proceeds will be used to repay the acquisition bridge facility that partially funded the acquisition of a 45% interest in Sierra Gorda. It's not hard to see how bankers and advisors generate fee income in these scenarios. USD700 million will be raised at a cost of debt of 4.35% per annum, with interest paid semi-annually. This is the company's inaugural USD bond issue and support from investors will give further momentum to the company. The share price is up over 21% this year.
Telkom has reached an out-of-court settlement with the Independent Communications Authority of South Africa (ICASA). Telkom has agreed to withdraw its court application on the basis that ICASA has undertaken to license remaining spectrum by no later than 30 June 2022. In that auction of the unassigned 800MHz, it will have regard to "imbalances" and the "need to promote competition" so Telkom is hoping to get a bigger slice of the pie here. ICASA will also investigate a possible secondary mar ket for spectrum and what effect this might have on competition. Overall, this is a forward-looking settlement in which Telkom is hoping to drive favourable behaviour from the regulator.
RMI shareholders will receive the unbundled Discovery and Momentum Metropolitan shares on 25th April. As a reminder, RMI is unbundling its 25% holding in Discovery and 26.8% holding in Momentum Metropolitan to shareholders. Going forward, the primary asset in the group is OUTsurance, with the rest of the portfolio in RMI Investment Managers and venture capital stakes held through AlphaCode.
Gemfields shareholders can look forward to the receipt of a dividend on the 6th of May. The dividend amount has now been calculated based on a specified foreign exchange conversion date, so a dividend of just over 25 cents per share will be paid to shareholders on the JSE register.
Another dividend coming soon is from Angl o American, with 2,519.61 cents per share to be paid on 26th April. As always, these dividend figures are quoted before dividends withholding tax.
The Public Investment Corporation (PIC) now holds a 9.925% stake in Thungela resources. In case you've been living under a rock (or a lump of coal), Thungela has created incredible wealth for investors since the unbundling from Anglo American and is up around 175% this year. The PIC has also moved above a 20% stake in Omnia, which has achieved share price growth of nearly 22% this year.
MC Mining's interim CEO Sam Randazzo will be leaving the company. He already stepped down as an executive director with effect from 8th April and will remain as interim CEO until the board finds a replacement. The announcement notes Randazzo's achievements during his tenure of just over a year as interim CEO, ranging from funding packages through to initiating and directing a bankab le feasibility study for the Makhado hard coking coal project.
Aveng Limited announced that JP Morgan Chase & Co now holds over 20% of shares in issue. Before you get confused about why a bank wants to own a construction company, these shares are held on behalf of clients and especially institutional funds. For example, Highbridge Capital Management LLC has a 12.52% stake through JP Morgan. This is a credit-focused investment house operating through hedge funds and other structures, with particular focus on less efficient markets. That would explain the interest in Aveng as a turnaround story in an illiquid market by US standards.
Another company that has benefitted from the improvement to South Africa's credit outlook is MTN. The telecoms giant has had its outlook changed from negative to stable by Moody's.
Buffalo Coal Corp has very low liquidity on the JSE, so the latest results get a passing mention here. In the year ended December 2021, the group swung from an operating profit of over R33.8 million in 2020 to a loss of nearly -R16 million. The group is in a negative equity position of R413 million. A R46.1 million loan from Investec has been restructured in a way that allows for some ongoing development of the critical Balgray project. The world of "junior mining" is a journey along a knife's edge for everyone involved.
Today's feature article is on BHP's merger of its oil and gas businesses with Woodside Petroleum. Sadly, Woodside won't be listing on the JSE, so locals have to watch from a distance. This is an important read for BHP shareholders.
There's also a brand new Magic Markets episode. In Episode 70, the Future Forex te am joined us to discuss bitcoin arbitrage. Every South African natural person has an asset in the form of an offshore annual allowance. Very few use it in full for global investments, so there's an opportunity each year to supplement your income with this arbitrage. Be sure to listen to the episode to find out more.
Finally, Chris Gilmour gives us the lay of the land for the week ahead in the markets.
Have a great Monday!
The Finance Ghost
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Local and Offshore Market News |
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| | | The Week Ahead The US Federal Reserve is likely to move further and faster than anticipated to reduce its balance sheet. Read More |
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