Trading Day – Nampak planning R2 billion rights issue

Nampak is required to repay R1.35 billion of net debt by 31 March 2023, which it plans to refinance. The refinancing is subject to the group raising capital of at least R1.35 billion.

Nampak is planning a R2 billion rights issue to address this debt and other capital requirements to improve its operations.

Murray & Roberts (M&R) has entered into an agreement to sell its entire stake in The Bombela Concession Company (BCC) to Intertoll International Holdings.

MTN has won in the High Court of South Africa. The Turkcell litigation has been dismissed with costs.

US markets rallied after FED chair Jerome Powell indicated that smaller interest rate increases are likely ahead and could start in December. The S&P 500 closed 3.1% higher, and the Nasdaq rose by 4.4%.

The Nikkei 225 is up 1% in early morning trade, while the Hang Seng index climbed 1.3%.

Here is the biggest news of the day.

• Nampak is seeking a rights issue of up to R2 billion. It plans to convene an extraordinary general meeting with regard to this and publish a circular on 15 December. The company issued a trading statement expecting a roughly 44% drop in headline earnings per share (HEPS) to between R0.33 and R0.37, while the previous basic earnings per share (EPS) of R0.32 is expected to turn to a loss of between R0.22 and R0.25. The group is required to repay R1.35 billion of net debt by 31 March 2023, which it plans to refinance. The refinancing is subject to the group raising capital of at least R1.35 billion. The remainder of the R2 billion rights issue is planned to be used to upgrade a beverage can line in South Africa (R350 million), to provide operating flexibility for seasonal fluctuations in working capital requirements (R150 million), and to cover the transactions costs of the refinancing and rights issue (R150 million).

• Murray & Roberts (M&R) entered into an agreement to sell Bombela Concession Company (BCC). The sale agreement with Intertoll International Holdings will see M&R dispose of its entire stake in The Bombela Concession Company, consisting of 3 300 000 ordinary shares in BCC, constituting 33% of the entire issued ordinary share capital, as well as all of the issued ordinary shares in Murray & Roberts BCC Financing Company, which holds 1 700 000 ordinary shares in BCC through a subsidiary, constituting 17% of the entire issued ordinary share capital of BCC.

• MTN has won in the High Court of South Africa – Turkcell litigation dismissed with costs. Turkcell and its wholly owned subsidiary, East Asian Consortium (EAC) instituted legal action in the High Court of South Africa against MTN Group in 2013. Turkcell and EAC sought substantial damages from MTN on the basis of allegations that the first private mobile telecommunications license in the Islamic Republic of Iran was improperly awarded to MTN. In November 2020, Turkcell withdrew as a Plaintiff, leaving EAC as the sole Plaintiff. In a judgment handed down by the High Court of South Africa on 30 November, EAC’s action against MTN has been dismissed with costs, putting an end to the Turkcell Litigation.

• Sasol expects a big jump in earnings. The company published a trading statement expecting at least a 20% increase compared to previous earnings per share (EPS) of R23.98 and headline earnings per share (HEPS) of R15.21. The company continues to see a benefit from higher oil prices and a weaker Rand. Sasol did not yet provide a range for the increase in earnings. Its half-year results are due on 21 February.

• Salungano expects to make a loss. The company released a trading statement for its half-year results ended September. It expects headline earnings per share (HEPS) to change from R0.21 to a loss of between R0.19 and R0.22. Basic earnings per share (EPS) is expected to change from R0.20 to a loss of between R0.19 and R0.24. EBITDA is expected to be between R170 million and R200 million. The group’s interim results are due on 7 December.