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Premier listing cancelled due to Ramaphosa crisis triggers market volatility

by Radarr Africa
written by Radarr Africa

Investment holding company Brait said on Friday it has opted not to list fast-moving consumer goods group Premier on the JSE due to volatility, especially over the past 48 hours.

On Thursday, the rand and local bonds crashed as investors considered the prospect of an early exit for President Cyril Ramaphosa.

Brait owns 97% of Premier, whose brands include Iwisa maize, Snowflake flour and Mr. Sweet, and announced plans in November for a potential listing, giving an equity valuation of between R6.9 billion and R8.9 billion.

The offer size was R3.7 billion, with R200 million of this a “greenshoe” option, which allows the issuing company to receive more capital if demand is higher than anticipated.

“Premier received a significant amount of investor interest and support for the business. However, the South African capital markets (in particular over the last 48 hours) have not been conducive to supporting a successful Initial Public Offering,” Brait said in a statement.

“Therefore, the Premier board and shareholders have resolved not to proceed with the offer at this time.”

ALSO READ: Sanlam and Absa officially partner to form South Africa’s largest black-owned asset manager

Brait had said if the listing didn’t proceed, Premier would then move private, in terms of which retail magnate Christo Wiese’s Titan and RMB – as underwriters of the proposed listing – would acquire roughly 50% of the group for R3.5 billion, with the remainder held by Brait.

“The Premier Board, management and shareholders remain excited about the opportunity to execute Premier’s growth strategy under private ownership,” Brait said.

In June, giant Coca-Cola Beverages Africa indicated it was delaying its plans to list on the local bourse. Brait’s shares were down almost 7% to R3.89 in midday trade on Friday, having fallen 16% so far in 2022.

SOURCE: News 24

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BusinessEnergySouthern AfricaTechnology

Eskom addresses R50 billion debt the South African government owes

by Radarr Africa
written by Radarr Africa

South Africa has established a multi-disciplinary revenue committee to address municipal and government debt to Eskom which currently sits at around R50 billion.

Eskom is part of the committee, and President Cyril Ramaphosa described the debts owed to the power utility as “unacceptable” while speaking to the National Assembly on Thursday, 3 November 2022.

“We have established a multi-disciplinary revenue committee — and Eskom is part of this committee to address payment of debt to the utility by municipalities and various other organs of state,” he said.

Ramaphosa said the Department of Public Works and Infrastructure had been tasked with helping municipalities and organs of state to pay their power-related debts.

“For the month of September 2022, as an example, the department paid R575 million for property rates and municipal services, and processed invoices to the value of R51 million to Eskom,” he said.

“Where there are disputes, as there often are, the department pays what is not disputed and engages the municipalities for amounts and accounts that are disputed.”

The president explained that the relevant departments and various treasuries participate in regular engagements to resolve all outstanding debt from municipalities and government entities.

“The department of corporate governance and the South African local government associations are part of these consultations that are ongoing for amounts that may be incorrectly reported,” Ramaphosa said.

“This is an ongoing process, and we hope it will continue to gain traction and result in a situation where less and less municipalities, as well as government departments and entities, owe less money to Eskom.”

Ramaphosa was delivering his opening remarks at a meeting of the National Assembly, set up for him to answer various parliamentary questions.

Among the questions were two from Economic Freedom Fighter (EFF) leader Julius Malema, who asked for full details regarding South Africa’s extensive rolling blackouts.

He also asked whether a change of leadership at Eskom may be needed to secure electricity stability in South Africa.

Regarding Eskom’s leadership and more specifically, its CEO, André de Ruyter Ramaphosa explained that he was appointed on a five-year contract in January 2020 and reports directly to the Eskom board, which conducts the relevant performance reviews.

He noted that the new Eskom Board was only appointed on 1 October 2022 and still needs time to plan a way forward.

“The new Eskom board was appointed on the first of October this year and should be given the space to assess what needs to be done to improve the efficiency of the existing plants, and effectiveness of the management and operators at all levels,” Ramaphosa said.

“This is a process I believe they have started to embark on or will be embarking on soon.”

Ramaphosa explained that the recent extensive load-shedding could be attributed to structural and operational causes.

“Among the structural challenges is the fact that there has been insufficient investment at the Eskom level in new generation capacity,” he said.

“New generation builds [were] needed two decades ago, and this has resulted in a national capacity shortage of between 4,000 and 6,000MW.”

ALSO READ: Eskom reveals Kusile unit1 gas failure, possibilities of remaining offline for months

He added that the situation was exacerbated by delays in building the Kusile and Medupi power stations and several other factors.

“This situation obviously was made worse by the delay in building Kusile and Medupi, the faulty design that has accompanied that whole build, state capture and corruption, and the loss of experienced staff,” Ramaphosa said.

“As a result of these challenges, power stations were run very hard to their maximum capacity, with poor reliability on maintenance and neglect of mid-life refurbishments.”

Eskom announced last night that there was a failure at one of Kusile’s flue gas desulphurisation ducts on 23 October.

This could cause Kusile Unit 1 to remain offline for months, and has delayed the return to service of Unit 2 until the power utility concludes an investigation and assessment into the damage.

Source: My Broadband

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AfricaAFRICA NEWSEnergyNewsPoliticsSouth AfricaSouthern Africa

Ramaphosa under fire from opposition parties over energy crisis in South Africa

by Radarr Africa
written by Radarr Africa

As Stage 6 load shedding over the weekend set alarm lights flashing, President Cyril Ramaphosa is under increased political pressure from opposition parties over the country’s energy crisis.

The situation is so dire Ramaphosa is cutting his overseas trip short to deal with the electricity crisis.

He was expected to leave England and return to the US after the funeral of late UK monarch Elizabeth Windsor. Instead, he would return to South Africa directly after the funeral.

When he sets foot back on South African soil, Ramaphosa will do so facing increased political pressure from opposition parties.

On Tuesday, DA leader John Steenhuisen will deliver a public address on “solutions to urgently tackle Eskom’s imminent collapse and fast track the procurement and provision of electricity to our nation where the ANC has repeatedly failed”.

“As Eskom plunges South Africa into Stage 6 load shedding this week, our country is facing what experts have referred to as a ‘catastrophic’ event as our national electrical grid buckles under the pressure of decades of corruption, mismanagement, and unworkable policy proposals by President Cyril Ramaphosa, Energy Minister Gwede Mantashe, and the ANC in national government,” read the DA’s statement.

While most of the DA’s focus has been on Ramaphosa and Mantashe, DA MPs Jan de Villiers and Henro Kruger, in a joint statement, also took aim at Small Business Development Minister Stella Ndabeni-Abrahams.

They said the ongoing electricity crisis posed “the single biggest existential threat” to businesses in the SMME sector.

“The power supply crisis is the direct consequence of the ANC’s hostile state interventionist and race-based policy approach to the energy solution. This guiding ideology incentivised corruption on an industrial scale,” read the statement.

“Every small enterprise founded from 2007 onwards has had to contend not only with an over-regulated and over-politicised market, but also with the devastating effects of persistent power outages.

“And, due to cost constraints that are inherent to the infant nature of most small businesses, investment in expensive alternative energy supply systems is simply not an option.

“However, by taking part in small-scale energy generation activities, SMMEs can play a significant role in the solution to solving South Africa’s power crisis.

“It is therefore unconscionable that the minister of small business development, Stella Ndabeni-Abrahams, is not actively working to promote increased SMME participation in the renewable energy sector.”

FF Plus MP Wynand Boshoff said he did not expect the energy crisis to be resolved while the ANC was in power.

“Even though the country’s economy is being forced to its knees, the government keeps clinging to two policies, without which the current crisis would not even have existed. They are affirmative action and a resistance to privatisation,” he added in a statement.

“So, power consumers who need reliable power supply will have to generate it themselves, at least for the foreseeable future.”

Cope spokesperson Dennis Bloem took aim at Public Enterprises Minister Pravin Gordhan and Eskom CEO André de Ruyter.

He said De Ruyter and the entire Eskom board must resign immediately, as it had become clear they could not resolve the crisis.

Bloem added it was clear Ramaphosa, Gordhan and De Ruyter did not understand how load shedding devastated the economy.

He said:  “We are tired of the empty promises of President Cyril Ramaphosa and Minister Pravin Gordhan”.

Answering questions in the National Assembly last week, Deputy President David Mabuza “empathised” with the concerns about load shedding.

ALSO READ: South Africa faces risk of unprecedented level of power outages

“We do empathise with your sentiments given the ongoing challenges of load shedding that the country is once again confronted with.

“We have stated previously that, in the main, unanticipated breakdowns of our ageing fleet of power plants contribute to load shedding. Needless to say, we are focusing on improving maintenance and repairs to ensure increased energy availability,” Mabuza said.

Source: News24

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