Wealth Advisory Newsletter

Business community to provide help, skills to both Eskom and NPA

The business community will step in to help Eskom safeguard its infrastructure, as well as provide the National Prosecuting Authority with the skills it needs to successfully prosecute those involved in state capture, reports Business Day. This comes after business leaders met on 12 August to discuss how to take forward a request that was made at the beginning of that month by Eskom chief executive Andre de Ruyter, for help in protecting Eskom’s equipment from sabotage and theft.

Business Leadership South Africa says that business was concerned about electricity supply because rolling blackouts making doing business expensive, if not impossible.

The theft of cables, overhead lines, transformers and conductors have cost Eskom about R2 billion a year, hampering the power utility’s ability to provide a service.

Remgro-led consortium reaches agreement to buy out Mediclinic

In a cash offer by Manta Bidco Limited, which also includes SAS Shipping Agencies Services as a key shareholder, a consortium led by Remgro has reached an agreement with JSE-listed private hospital giant Mediclinic International to buy it out in a cash offer, reports Moneyweb. This represents around a 50% premium to the group’s volume-weighted average share price for the six months to 25 May 2022.

“Confirming the deal in a Stock Exchange News Service (Sens) alert on 11 August, the hospital group said the boards of Manta Bidco Limited (Bidco), Remgro Limited, SAS Shipping Agencies Services (SAS) and Mediclinic (excluding the Remgro representative) ‘are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco to acquire the entire issued and to be issued ordinary share capital of Mediclinic’. This excludes Mediclinic shares that Remgro subsidiaries already own, which represents a stake of around 44.56%,” reports Moneyweb.

The news service further states that according to the Sens report, the acquisition values the entire issued and to be issued ordinary share capital of Mediclinic at approximately £3.7 billion (around R75.33 billion at the current rand/British pound exchange rate) and an implied enterprise value of approximately £6.1 billion (R124.2 billion). It also states that under the terms of the acquisition, scheme shareholders shall be entitled to receive 504 pence (approximately R99.81) in cash for each Mediclinic Share held.

Eskom proposes new tariffs

Eskom has proposed new tariffs, which will come into effect on 1 April 2023 if approved by the National Energy Regulator of South Africa (Nersa), writes Fin24.

The news service reports that the tariffs reflect changes in how fixed costs will be recovered. Eskom also proposes a time-of-use residential tariff and a net billing system to offset the bills of customers who feed power to the grid.

Fin24 writes that Eskom has proposed a new tariff for residential consumers – charging them based on the time they use electricity – while also allowing those that feed power to their grid to offset their electricity bills. The power utility submitted this and other proposals in its new tariff plan to Nersa. The proposed retail tariff plan is a revision of a 2020 submission to the regulator, which the latter did not decide on. If approved by Nersa, following a public consultation process, the changes will be in place from 1 April 2023.

Comair buyer must show proof of at least R500 million

A leaked letter seen by Fin24 shows that parties interested in buying Comair must show funding of at least R500 million (US$50 million), reports the news service. Furthermore, it reports that – according to the letter – some Comair assets, including cars and office furniture (even airplane chairs) were put up for auction in mid-August. Comair’s various operating licenses are regarded as its most valuable unsecured assets.

Fin24 reports that, according to communication by the provisional liquidator, any party interested in buying Comair must show proof of funding of at least R500 million or US$50 million. The provisional liquidators have previously indicated that they received 21 letters of interest from parties who either want to buy the company as a going concern or purchase some of its assets. Because confidentiality agreements have been signed, the names of interested parties are not known.

“Comair operates in the highly regulated aviation sector, which means the liquidators must ensure parties interested in buying the company comply with the relevant laws and regulations. In addition to the proof of funding, interested parties must also provide their latest audited financial statements, as well as a list of investors and shareholders, both direct and indirect. They must also indicate whether funding will be from external resources or other investors,” writes Fin24.

African businesses can raise up to R10m on this crowd funding platform

African businesses can raise up to R10 million in capital on crowd funding platform GoGetta in exchange for shares, reports Business Insider. Qualifying businesses are those that are African and operate in sectors within fintech, agriculture, consumer, energy, enterprise, healthcare, retail and more. Interested investors can be based anywhere in the world and will need to invest a minimum of R1,000 or more.

Business Insider writes that the platform, powered by Grovest, an administrator in the small cap investment space, allows local and international venture capital investors to invest from as little as R1 000 into emerging African businesses.

“The platform seeks to solve two investment problems. The one, is setting up a way for up-and-coming businesses to access capital. The other, is an easy but secure way for investors to put money into these types of ventures,” adds the news service.

Sthembiso Zwane, co-founder of GoGetta says that “Quality African businesses are struggling to raise capital using traditional financiers such as banks. Crowdfunding is a billion-dollar global industry and it is time for Africa to weigh in. GoGetta is a solution to these funding issues and unlocks the potential of Africa’s entrepreneurs."