MENU

Author

New MTN boss hints at cut to $5.2 bil Nigeria fine

10 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – The newly installed head of South Africa’s MTN has hinted that he would seek to reduce a $5.2 billion fine imposed on African’s biggest mobile telecoms company by the Nigerian authorities.

Non-executive chairman Phuthuma Nhleko was named executive chairman of MTN for up to six months after Sifiso Dabengwa stepped down as CEO with immediate effect on Monday.

His priority is dealing with the crisis in Nigeria, Africa’s most populous nation, which is MTN’s largest market and contributes more than a third of its revenues.

“I can’t say whether we’ll pay the whole fine. I don’t want to negotiate with Nigerian regulators on a public forum,” Nhleko, who is also a former CEO of MTN, told Talk Radio 702.

MTN has a deadline of Nov. 16 to pay the fine imposed on its unit in Nigeria for failing to cut off more than 5 million users with unregistered SIM cards.

The Nigerian communications regulator has been pushing cell phone network companies to verify the identity of their subscribers because of fears that unregistered SIMs were being used for criminal activity.

MTN would not comment on whether it has approached banks to ensure enough cash is available should the fine be enforced.

“The planning is based on all possible outcomes and contingencies and our aim is to comply with all regulations in Nigeria,” said MTN spokesman Chris Maroleng.

But analysts say Nhleko is pulling out all the stops to get the fine reduced.

“Nhleko will bring the matter to a conclusion,” said 36One Asset Management analyst Jean-Pierre Verster.

“I expect there will be a discount of somewhere between 5 percent and 75 percent.”

He sees the Nigerian regulator’s renewal of MTN’s operating licence last week as a sign that the regulator could cut MTN some slack.

Political risk consultancy eurasia said MTN would probably secure a reduction to the fine.

“We expect an eventual compromise to sharply scale back the size of the penalty (to less than half the original amount), especially as MTN takes concrete steps to address the regulator’s concerns,” it said in a published note.

Shares in MTN were down 3.9 percent at 153.75 rand by 1252 GMT, compared to a 1.6 percent drop in the Johannesburg Stock Exchange’s benchmark Top-40 index.

 

(Reporting by TJ Strydom; Editing by James Macharia and Keith Weir)

tagreuters.com2015binary_LYNXNPEBA90OX-VIEWIMAGE

Read more

Access Infra Africa signs plan for $100 mil Nigerian solar plant

10 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Access Infra Africa has signed a joint development agreement with Nigerian Quaint Global Energy Solutions for a 50 megawatt solar power plant that is expected to provide electricity for over 600,000 homes in northern Nigeria, the partners said on Tuesday.

The west African nation has chronic power shortages due to a dilapidated transmission grid and natural gas constraints while the new generating and distribution companies are still struggling to be profitable since the 2012 privatisation of the sector.

Power output has risen since President Muhammadu Buhari was inaugurated at the end of May, fluctuating at just under 4,000 MW per day over the last few weeks versus just over 3,000 MW under the former administration, according to transmission data. But the level is still far below the country’s needs.

Businesses rely heavily on expensive diesel generators while the average Nigerian must put up with days of blackouts.

The ABIBA plant in northern Kaduna state is expected to be built in the next two years though the partners must still negotiate a Power Purchase Agreement (PPA) with the Nigerian Electricity Regulatory Commission (NERC) before it can seek financing from banks.

Access Infra Africa, a renewable power developer with a presence in 17 African countries, will contribute the bulk of the 30 percent equity put down for the $100 million project.

Quaint has also received a $1.3 million grant from the U.S. Trade and Development Agency for ABIBA.

If successful, the solar farm would be the first in the country and largest such plant on the continent outside South Africa.

Other renewable energy projects became stuck in the PPA phase under the previous administration and stalled due to an unprofitable tariff but the NERC announced a new feed-in tariff at the start of November for renewable projects up to 30 MW.

Buhari has made increasing power generation a priority as better access to power will be key to his goal of diversifying the economy.

 

(Reporting By Julia Payne; editing by Susan Thomas)

tagreuters.com2015binary_LYNXNPEBA90RQ-VIEWIMAGE

Read more

Egyptian shareholder in “constructive” talks with Adidas

10 November 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

BERLIN (Reuters) – Egyptian tycoon Nassef Sawiris, who controls 6 percent of the voting rights in Adidas, says he wants a constructive relationship with the German sportswear company.

Sawiris, whose NNS Holding fund has a 1.7 percent direct stake in Adidas, has also accumulated an additional 4.3 percent of the company’s voting rights due to “put” options he has bought that should allow him to acquire further shares.

Asked about his intentions for the investment, Sawiris told Reuters by telephone he was “interested in a constructive dialogue” with the company.

Adidas Chief Executive Herbert Hainer said last week the company had quite an “intense dialogue” with most of its key shareholders. Asked about Sawiris, he said: “Everybody is welcome and if somebody can help us we are open to listen.”

Earlier this year, Belgium’s richest man Albert Frere, who together with Sawiris was a major shareholder in French cement company Lafarge before its merger with Swiss rival Holcim, acquired a 3 percent stake in Adidas.

They have made these investments as Adidas is looking for a successor to long-serving Hainer, who came under fire last year after the company lost more market share to Nike and suffered from falling golf sales and its exposure to Russia.

Adidas shares have risen 18 percent in the last three months, compared to a 6 percent fall in the German blue-chip index. J.P. Morgan analysts said the rise could partly be explained by the stock building of Sawiris.

In May, Hainer said he had hired advisers to help fend off any potential hostile takeover bid, although he said back then Adidas had not been approached by activist investors seeking to build a stake.

Adidas said in August it was considering the possible sale of its golf brands, as demanded by some investors, but Hainer has rejected selling fitness brand Reebok, saying the long-struggling business he bought in 2005 is now on the mend.

Adidas shares jumped last week to their highest level since January 2014 after the company reported better-than-expected third-quarter results, raised its full-year guidance for sales and profits and gave an upbeat outlook for 2016.

 

(Reporting by Emma Thomasson and Joern Poltz; Editing by Arno Schuetze and Jane Merriman, Reuters)

Read more

Nigeria’s Stanbic IBTC cuts 2015 loan growth forecast to 3%

9 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s Stanbic IBTC has cut its 2015 forecast for loan growth to 3 percent from 10 percent, citing the impact of slowing economic activities on businesses, the local unit of South Africa’s Standard Bank said on Monday.

Africa’s biggest economy posted its lowest output growth for five years in August with its economy expanding 2.35 percent in the second quarter against 6.54 percent a year ago. Stanbic said the slowdown continued in the third quarter.

The mid-tier lender said loans grew marginally by 1 percent to 418.3 billion naira ($2.1 billion) in the first nine months and lowered its return on equity (ROE) target to 15 percent from 18 percent, it said in a presentation.

 

(Reporting by Chijioke Ohuocha, editing by David Evans, Reuters)

 

Read more

South Africa’s Vodacom lifts H1 profit on data boom

9 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African mobile phone operator Vodacom on Monday reported a 6 percent rise in half-year profit, buoyed by sharp growth in data revenue.

The South African unit of Britain’s Vodafone has spent billions to expand its network in recent years with a strong focus on providing faster internet to its customers as more of them get smartphones.

“We’re becoming more of a big data provider, an internet provider if you like,” Vodacom Group Chief Executive Shameel Joosub said in a conference call with reporters.

The company said headline earnings per share – the main profit measure in South Africa and strips out certain one-off items – rose to 440 cents from 415 cents, in the six months ended Sept. 30.

Data revenue was up 33.5 percent as Vodacom increased 4G coverage in its home market, the company said.

“In South Africa, LTE/4G coverage increased from 32.2 percent to 46.8 percent,” said Joosub.

Customers that have access to 4G have increased to nearly 2 million in Africa’s most advanced economy and they use almost three times more data than those stuck with lower speeds, Joosub said in a statement released with the results.

The company is forming partnerships with content providers to get its customers to consume more videos and music on smart devices as it tries to rake in more data revenue.

“We need to play more in the content space,” Joosub said.

Vodacom’s smartphone users consume around 425 MB of data per month, compared to 2 GB in the U.S. and Britain which Joosub sees as an opportunity for growth.

Shares in Vodacom were up 1.5 percent to 150.73 rand by 0755 GMT.

 

(Reporting by TJ Strydom; Editing by James Macharia, Reuters)

Read more

ArcelorMittal SA plans $323 mil rights issue, plus possible bond

8 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – ArcelorMittal’s South African business plans to raise up to $323 million through a rights issue and is considering a $350 million bond issue, it said on Friday, as it battles falling steel demand, rising cheap imports and higher costs.

Steel companies around the world are grappling with a global supply glut that has sent producers’ share prices to their lowest levels in more than a decade and prompted the ArcelorMittal parent company to cut its full-year profit guidance on Friday.

ArcelorMittal SA, Africa’s biggest steelmaker, plans to raise between 4 billion rand and 4.5 billion rand ($322.77 million) from new shares that could dilute the current shareholding by 30 percent, it said after flagging an annual loss expected to be 11 times bigger than last year’s 277 million rand.

The cash call, at least 14 percent bigger than the company’s market capitalisation, is fully underwritten by the parent company.

The South African business is also considering issuing up to $350 million of bonds, finance chief Dean Subrimanian told Reuters.

“The bond would be subject to how much we raise on the rights issue,” he said.

The company said it would use the money to pay off debt, which stands at 3.2 billion rand, with the balance used for operational and capital expenditure.

Shares in ArcelorMittal SA fell as much as 12.6 percent to their lowest level in 14 years on Friday. By 1125 GMT, the stock had recouped some of the losses to trade 6 percent lower at 7.36 rand.

 

JOB CUTS

To cope with weak demand and rising costs, the company has said it would close parts of its Vereeniging Works plant and cut about 283 jobs as part of a review of its operations.

Along with industry rivals, ArcelorMittal SA has also asked the South African government to introduce import and anti-dumping tariffs to help them compete against cheap steel coming mainly from China.

“If we go, the industry goes.” Chief Executive Paul O’Flaherty told reporters on Friday.

ArcelorMittal SA reported 16 percent higher output in the quarter to Sept. 30, but sales to China fell 20 percent.

“Market conditions are expected to remain tough and all our units are expected to maintain their current below-capacity production levels,” it said

Separarely, the company and its raw material supplier Kumba Iron Ore have amended their supply agreement, under which ArcelorMittal SA paid costs plus 20 percent for iron ore.

Under the new deal, ArcelorMittal SA would pay an export parity price, or the price Kumba can expect to get if its product is exported, that would be discounted by as much as 7.5 percent depending on the market price of iron ore.

“This pricing amendment is commercially acceptable and sustainable for both parties,” Kumba Chief Executive Norman Mbazima said in a statement.

 

(Editing by Tiisetso Motsoeneng and David Goodman. By Zandi Shabalala. Reuters)

Read more

South Africa’s rand falls to record low on strong U.S. jobs data

7 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand weakened sharply to a record low against the dollar after firmer-than-expected non-farm payrolls data from the United States on Friday.

By 1413 GMT the rand had slipped 2.0 percent to 14.1700, its weakest level ever against the greenback as the growing likelihood of a rate hike by the Federal Reserve in December pressured emerging assets.

“The move is dollar bound, because of the non-farm payrolls. It means they (U.S. Fed) can start lifting interest rates and that is obviously bad for the rand,” NKC African Economics chief economist Christie Viljoen said.

The local unit ignored central bank data showing domestic net gold and foreign exchange reserves edged up slightly to $41.308 billion in October but succumbed to dollar strength following the positive jobs data.

The dollar rose to a 6-1/2 month high after the U.S. jobs report beat expectations, increasing 271,000 last month to its largest rise since December 2014.

Stocks also fell, with the blue-chip index down 2.5 percent to 47,332 points following the U.S employment figures.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia, Reuters)

Read more

Botswana’s August trade balance slips to $159 mil deficit y/y

6 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

GABORONE (Reuters) – Botswana’s trade balance swung to a 1.7 billion pula ($159 million) deficit in August from a 1.82 billion pula surplus in the same period last year due to a sharp fall in diamond exports, the statistics agency said on Friday.

On a month-on-month basis, the trade balance recorded a 1.7 billion deficit in August compared with a 486 million pula in July.

The data shows that while imports remained relatively flat, the August month-on-month deficit was driven by a significant 34 percent decline in exports from 4.6 billion pula to 3.03 billion pula.

 

(Writing by Mfuneko Toyana; Editing by James Macharia, Reuters)

 

Read more

Mauritius tourist arrivals rise 10.4% in 10 months to Oct

6 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

PORT LOUIS (Reuters) – The number of tourists visiting Mauritius rose 10.4 percent in the 10 months to October from the same period last year, with more arrivals from Asia, figures showed on Friday.

Tourism is an important component of the economy and a key source of hard currency for the Indian Ocean island state, best known for its luxury spas and beaches.

Arrivals increased to 912,770 during the period, the ministry of Tourism said. Numbers from Asia rose 24.1 percent to 166,487, with visitors from China up 42.4 percent.

“Barring any unexpected circumstances, we should attract an additional 100,000 tourists this year,” Xavier-Luc Duval, the minister of Tourism said in a statement.

Last month Duval told Reuters in an interview that a major focus was boosting numbers during the island’s winter season, running from June to September, by drawing more visitors from India, China, Africa and Russia.

The number of tourists visiting from Europe, which accounts for two-thirds, rose by 9.9 percent to 487,487.

Despite the rising numbers, central bank figures suggested tourist revenues in the first half had fallen by 3.5 percent. The tourism minister said hotels had not seen a revenue fall and the central bank has said it is reviewing its figures.

 

(Reporting by Jean Paul Arouff; editing by Drazen Jorgic and John Stonestreet)

Read more

Tunisian annual inflation rises to 4.6% in October

5 November 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

TUNIS (Reuters) – Inflation rose to 4.6 percent in October after remaining steady for the past three months at 4.2 percent, official figures showed on Thursday.

The food and drink price index rose 5.6 percent in October from a year earlier, the state statistics institute said.

Tunisia’s central bank said last week it had cut its main interest rate to 4.25 percent from 4.75 percent to boost economic growth, as inflation rates fell.

Inflation dropped to 4.4 percent in the first 10 months of this year, compared with 5.5 percent last year.

The bank does not target a particular inflation rate but says the highest that should be tolerated is 5 percent.

 

(Reporting by Tarek Amara; Editing by Tom Heneghan, Reuters)

Read more