In a year when SA experienced record-high levels of load-shedding and Phala Phala entered the country’s lexicon, local and global markets also had to fight an uphill battle with the war in Ukraine triggering global market and economic turmoil.
On the markets front, while some local companies benefited from listings on the JSE, others left the local bourse. Some had to make sense of failed deals, and others handed over the books to business rescue practitioners.
Here are 10 of the stories that made headlines on Africa’s largest stock exchange:
PSG Group
The investment heavyweight unveiled its two-pronged deal to spin off stakes in several publicly
listed companies as it started drawing the curtain on its listing on the JSE after 27 years.
“Our investment model has fallen out of favour globally,” CEO Piet Mouton said at the time.
Mouton hit out at the local bourse in 2021, saying there was too much red tape in staying listed and it hobbled deal-making.
The delisting meant spinning off its stakes in financial services firm PSG Konsult, private school group Curro, farming and fuel retailer Kaap Agri, distribution firm CA&S Group and tertiary education provider Stadio.
In August, 95% of shareholders voted in favour of the delisting.
MTN/Rain
Africa’s biggest mobile operator MTN announced it was in talks to buy state-affiliated, fixed-line operator Telkom in what looked like a move to bolster its fibre asset base.
This would have tied in with its plans to grow revenue from new areas such as mobile money and its infrastructure business, while Telkom has been working on separating Openserve, its fibre unit.
On the day of MTN’s announcement, Telkom’s share price surged.
Data-only operator Rain said on August 11 that it was also eyeing Telkom. The next day, investment firm Toto Consortium offered R7bn for the government’s direct stake of 40.5% in SA’s third-largest mobile phone company.
Since then, MTN has pulled out of the deal, leaving Rain as the only potential suitor.
Tongaat Hulett
The future of SA’s biggest sugar producer and land developer, Tongaat Hulett, is in the hands of business rescue practitioners, with the livelihoods of thousands of workers in KwaZulu-Natal on the line as the troubles continue at the company.
The sugar mill giant was suspended from the JSE after it failed to publish its provisional results on time amid its restructuring plans. Shareholders criticised poor leadership and lack of transparency.
Turnaround specialist Piers Marsden was appointed chief restructuring officer in June. But now the future of SA’s biggest sugar producer and land developer is in the hands of business rescue practitioners, with the livelihoods of thousands of workers in KwaZulu-Natal on the line as the troubles continue at the company, which faced a debt pile of R6.8bn at end-March.
Last month, most creditors approved the extension of the date for publication of Tongaat’s business rescue plan to the end of January, while trade in its shares remained suspended.
The share price tumbled in 2019 when it was revealed that the company misstated financial results, with some former executives now facing charges of fraud for producing false, misleading and deceptive statements.
Capitec
The share price of SA’s third-largest bank by market capitalisation hit a near 11-month low after a trading update disappointed the market. Its share price fell 10.4% to R1,612.50, the steepest drop since July 2020.
Global inflation and interest rate concerns worsened the bank’s earnings guidance.
Two weeks earlier, Capitec’s share price had dropped as the market took a dim view of its interim dividend, with some analysts saying it was less than expected.
Murray & Roberts
It was happy days on November 8 after specialist engineering group Murray & Roberts (M&R) announced that Italian industrial group Webuild had agreed to buy its stake in its Australian construction subsidiary, Clough for A$350m (R4bn).
M&R’s share price rocketed after the surprise announcement of the sale of the Perth-based business, which was at the heart of M&R’s growth strategy in Australia but whose projects posed a risk to its balance sheet.
However, the deal, which was seen as the best way to address Clough’s urgent need for working capital, collapsed on December 5, leading to Murray & Roberts Pty Ltd, an indirect wholly owned subsidiary of M&R and its holding company in Australia, being placed in business rescue.
This triggered a 21.05% drop in M&R’s share price, the second-biggest loss on record, according to Infront data.
Gold Fields
The gold producer saw its share price leap more than one-fifth after its failed deal to buy Yamana Gold, a Canadian rival. This was good news for investors, but not for former CEO Chris Griffith who fell on his sword earlier this month. He shouldered the blame as precious metal companies Agnico Eagle and Pan American tabled a joint bid which, Yamana accepted.
If Gold Fields had succeeded, it would have become the fourth-largest gold miner in the world in terms of gold production, behind Newmont, Barrick and Agnico Eagle.
However, investors were never really happy about the possible takeover, with the share price of Gold Fields plummeting almost 20% when the deal was first announced in May this year.
Premier Group
The news of the food producer’s listing on the JSE had been expected for some time before it was announced in November.
A price range of R53.82-R67.04 per share was expected, which would have meant a market capitalisation of R6.9bn-R8.6bn, making it one of the largest initial public offerings on the JSE for some time.
The company, which owns brands such as Blue Ribbon bread, Iwisa maize and Snowflake flour, accounts for 54% of the total assets of Brait, and its listing was expected to see the private equity firm rake in about R3.7bn in gross proceeds.
However, less than a month later Premier decided against going public, citing recent turmoil on local markets, particularly after an independent report into the theft of foreign currency from Cyril Ramaphosa’s Phala Phala game farm found the president may have violated the constitution.
Barloworld and Zeda
The diversified industrial group has been trimming down its sprawling portfolio over the past few years to focus on core earth-moving equipment, as well as its food procurement businesses. Part of the process included spinning off and listing its car rental and leasing business under the name Zeda in December.
Zeda houses established car rental brands Avis and Budget, but they faced a trying time during the pandemic when leisure and business tourism numbers dried up.
The new listing was a welcome boost to the JSE, which has been plagued by several delistings in recent years as it now houses 305 listed companies compared with 800 in early 2000.
Zeda is valued at R2.48bn on the JSE and houses a fleet of 250,000, which includes heavy-duty vehicles. Due to the fundamental shift, the group is now also involved in financing, utilisation and vehicle management.
Nampak
The share price saw its worst single-day drop — plunging more than 30% after the packaging company proposed a rights issue to the tune of R2bn to meet its debt obligations. The present share price of R1.04 a far cry from Nampak’s peak of R40 a few years ago and even R4.33 on February 15 this year.
Nampak pushed into the rest of Africa from 2010 to 2012, when it racked up a debt pile of R5bn by end-March, far outpacing its current market value.
Its Africa operations span 10 countries, many of which depend on volatile commodity prices, and much of the expansion was funded in dollars.
Steinhoff
The share price of the embattled retail group lost more than half its value as it recorded its biggest one-day fall after announcing that debtholders will take majority control, leaving shareholders with no more than 20% and possibly even nothing. Investors scrambled to unload the stock, which ended the day down 64%.
It has since jumped back somewhat, but the company remains a shadow of what it was before fraud and accounting irregularities were unveiled in December 2017. The company and its former CEO, Markus Jooste, have since been the subject of books and the documentary series, Steinheist.
Steinhoff’s debt of about €10bn, which was due in June next year, exceeds the value of the group’s assets. The company announced that it had agreed with 64% of lenders to extend the repayment deadline. The deal will leave shareholders with 20% of the firm while the debtholders will control 80% and 100% of the voting rights. If shareholders do not agree to the debt extension deal, they could lose all their equity.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.