Africa Brief: Business News from around the continent
Ecobank eyes new CEO and Nedbank tie-up
Pan-African bank Ecobank is expected to appoint a new group CEO within the next three months as Albert Essien reaches the mandatory retirement age.
A new group CEO is expected to give direction on how the banking group is to address issues such as high costs. The bank’s cost-to-income ratio sat at about 66% in the nine months ended last September.
The other development at Ecobank is that it is considering bringing together its corporate and investment banking team in Johannesburg with, that of Ned-bank’s as part of a plan to strengthen ties and create the opportunity to access business in and out of SA.
Talk at the Africa CEO Forum in Geneva, Switzerland was that Johannesburg-based Ecobank group executive for corporate and investment bank Charles Kie was a top contender for the job. However, he did not want to comment on the succession process saying that candidates for the group CEO role had been invited to submit their applications by January 8.
by PHAKAMISA NDZAMELA, published in BUSINESS DAY on 17/03/2015
Securities market ripe for recovery after Abil’s fall
THE ASSET-BACKED securities market is ripe for recovery after the demise of African Bank showed investors that buying lenders’ debt carries risks, according to Future growth Asset Management. Securities market ripe for recovery after Abil’s fall
Securitisation of assets such as homes and cars might climb 13 percent this year to R8.5 billion after plunging more than 30 percent in 2014, Elena Ilkova at Rand Merchant Bank said. A rebound could be hastened as yields on South African bank bonds advanced to records relative to government debt, data showed.
The August collapse of unsecured lender African Bank signalled to money managers that they were exposed to losses in the case of bank failures, even as depositors were protected. This might push the market to diversify investments into instruments such as asset-backed securities, said Andrew Canter at Future growth.
by Renee Bonorchis, published in THE STAR BUSINESS REPORT on 16/03/2015
Aveng, Stefanutti Stocks also face summons
LISTED construction groups Aveng and Stefanutti Stocks have been included in the more than R428 million civil damages claim lodged against Wilson Bayly Holmes-Ovcon (WBHO) by the City of Cape Town for colluding on the tender for the construction of the Green Point Stadium for the 2010 Fifa World Cup.
The City of Cape Town confirmed to Business Report last month that it had lodged the claim against WBHO in the high court in December. Ian Neilson, the City of Cape Town’s mayoral committee member for finance, subsequently confirmed the summons was issued against WBHO Construction, Stefanutti Stocks and Aveng jointly and severally for R429 474 878, alternatively R428 757 001, together with interest on the amount.
Neilsen said the quantum was determined through an assessment of the financial circumstances of the matter by a panel of expert economists, auditors and other professionals. But he said the exact method of quantification was still privileged at this point.
WBHO was in a joint venture with Murray & Roberts (M&R) when bidding for the tender and then won the tender. The project was completed in November 2009.
WBHO, Stefanutti Stocks and Aveng each made admissions related to the Green Point Stadium in the settlement agreements they reached with the Competition Commission in terms of the fast-track settlement process. M&R is not included in the City of Cape Town’s civil damages claim.
by Roy Cokayne, published in THE STAR BUSINESS REPORTon 16/03/2015
GSK sells its stake in Aspen
DEAL : GlaxoSmithKline sold half its stake in Aspen Pharmacare for R10.5bn to invest in new priorities. It sold about 28.2-million shares in Africa’s largest pharmaceutical manufacturer through institutional investors for R372 a share, Aspen said on Friday.
by Bloomberg, published in BUSINESS DAY on 16/03/2015
CoAL enters Makhado BEE deal
COAL of Africa (CoAL) has entered into an agreement in which some community empowerment representatives will buy a 26% stake of its Makhado hard coking and thermal coal project.
If concluded successfully, the transaction will help the project, near Musina in Limpopo, comply with empowerment legislation, said CoAL on Friday.
It would satisfy “one of the last remaining requirements for the granting of a new order mining right”.
The participants in the blackeconomic empowerment (BEE) deal include seven local communities represented through the Makhado Colliery Community Development Trust. They will buy 20% of the project.
by SIKONATHI MANTSHANTSHA, published in BUSINESS DAY on 16/03/2015
Eskom chair takes control of ‘probe’
ESKOM chairman Zola Tsotsi has put himself in charge of the “investigation” into the state of the utility and will head a board subcommittee with full delegated powers to determine the terms of reference, the contracting of investigators, and to oversee its progress.
The announcement last Thursday of the investigation, along with the suspension of four top executives, has caused consternation across the political spectrum, with credit rating agencies and trade unions sharing the view that the move will further destabilise Eskom.
The news that Mr Tsotsi would manage the investigation himself was grounds for even greater concern as best practice would require him to keep his distance and to allow a subcommittee of the board to report to him. Board members said a full mandate had been given to Mr Tsotsi at last Wednesday’s meeting after he had brought the proposal to it.
by CAROL PATON, published in BUSINESS DAY on 16/03/2015
Measuring black ownership on JSE
THERE has been much bluster recently about just how much of the JSE’s market capitalisation is owned by black people. The JSE put out some of its own numbers saying it is 23% of the top 100 companies. That number has been disputed, with some arguing it is less than 3%. You may think such range of disagreement is surprising, but at the heart of the dispute is a profound philosophical problem. The fact is very little of the JSE is owned by people at all.
More than 90% is owned by institutions like pension funds and life insurance companies. The problem is that there are big differences between the characteristics of natural persons and legal persons. It is a lively area of philosophical debate, for instance, about what sort of legal rights and responsibilities one can demand of legal persons compared to natural persons.
There is no debate, though, that race is a characteristic that we can only sensibly apply to natural persons.
by Stuart Theobald, published in BUSINESS DAY on 16/03/2015