By Nqobile Dludla

JOHANNESBURG (Reuters) – UK-based telecoms group Vodafone moved to consolidate two of its African interests on Monday with the transfer of a 35 percent stake in Kenya’s Safaricom to majority-owned South African subsidiary Vodacom.

The 34.6 billion-rand ($2.6 billion) deal, structured as an acquisition of the stake by Vodacom in return for new shares, is the latest move by Vodafone’s chief executive Vittorio Colao to rationalise the group’s disparate portfolio of interests around the world.

Colao said last month that the company would fold some of its operations in sub-Saharan Africa into Vodacom as part of a “single, coordinated Africa strategy”.

He told South Africa’s Business Day publication that it made sense to consolidate operations in Vodacom given the group’s “scale, advancement and competence in technology”.

The Safaricom deal also simplifies the management of two of Vodafone’s biggest money-spinners in sub-Saharan Africa and promises to speed up the roll-out across the continent of mobile money transfer service M-Pesa, which was launched by Safaricom in 2007.

“Vodacom Group sees scope to create further value through closer cooperation between both companies, including replication of Safaricom’s success in M-Pesa in Vodacom Group’s other territories,” Vodacom’s chief executive Shameel Joosub said.

Under the deal Vodacom said it will acquire a 87.5 percent shareholding in Vodafone Kenya, equivalent to a 35 percent indirect interest in Safaricom, in return for issuing 226.8 million new shares to Vodafone, raising the British company’s stake in Vodacom from 65 percent currently to 69.6 percent.

Vodafone will retain a 12.5 percent interest in Vodafone Kenya, equivalent to a 4.99 percent stake in Safaricom, the companies said.

For Vodacom, which also has networks in Tanzania, Democratic Republic of Congo, Mozambique and Lesotho, the transaction takes it into a market where Safaricom has a 71 percent share and demand is still growing for mobile services, including M-Pesa.

POLITICAL UPHEAVAL

The sale could be the first step for Vodafone, which also operates in Ghana and Ethiopia, to transfer more of its African assets into Vodacom.

“I think this is about simplification. It has been talked about for a long time,” said Macquarie Research analyst Guy Peddy.

It also shows a commitment by Vodafone to Vodacom, despite the political upheavals that have rocked South Africa in recent months.

South Africa lost its highly coveted sovereign investment grade credit ratings from two rating agencies last month after a cabinet shake-up that saw the sacking of respected finance minister and sparked a selling frenzy in bonds, stocks and the rand currency.

“Vodafone always takes a long-term view of politics and doesn’t really get into the political environment,” Joosub told Reuters.

“Although there would be concern around things like downgrades, there is always a long-term approach to South Africa and overall positive sentiment.”

Shares in Vodafone closed up 0.02 percent at 210.9 pence, while Vodacom’s share price was up 0.2 percent at 152.8 rand and Safaricom was up 1.2 percent at 20.50 shillings.

Safaricom, which is 35 percent owned by Kenya’s government, said in a statement the deal promoted the continued successful expansion of the company as well as the opportunity to take M-Pesa into other African markets.

Safaricom made a success of M-Pesa in Kenya whereas Vodacom’s launch of M-Pesa in Tanzania in 2008 and South Africa in 2010 disappointed.

“Vodacom’s first attempt at a money transfer business wasn’t very successful, but this deal could lead to better results,” Morning Star analyst Allan Nichols said.

Completion of the deal, which is subject to shareholders’ approval, is expected in August.

($1 = 13.1750 rand)

(Additional reporting by Duncan Muriri in Nairobi and Paul Sandle in London; Editing by Greg Mahlich)

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LAGOS (Reuters) – Nigerian workers at U.S. oil major Exxon Mobil Corp have gone on strike in protest over the sacking of workers, oil labour union officials said on Thursday.

Nigerian labour unions have criticised oil companies for sacking workers in the last few months and held a number of strikes.

Abel Agarin, who chairs the Lagos zone of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said members of his union were on strike in protest at the sacking of 150 workers in December. He said 82 were PENGASSAN members.

“We want them to be brought back and if that is not possible we want a proper severance package for them,” said Agarin, who led around 50 protesters in the commercial capital.

PENGASSAN said strikes were being held in Lagos, Bonny, Akwa Ibom and Port Harcourt.

A spokesman for Exxon Mobil said by email that there were “no impacts” on oil production.

Two oil traders said it was too early to say whether the strikes would have an impact on production.

Strikes by Exxon workers in Nigeria at the end of 2016 did impact output, leading to weeks-long loading delays.

(Reporting by Tife Owolabi, Libby George and Alexis Akwagyiram; writing by Ulf Laessing and Alexis Akwagyiram; editing by Jason Neely)

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CAPE TOWN (Reuters) – South Africa’s energy regulator has agreed to investigate power utility Eskom’s refusal to sign power purchase agreements with independent power producers, the South African Wind Energy Association (SAWEA) said on Thursday.

SAWEA last October asked energy regulator NERSA to investigate Eskom’s unwillingness to finalise agreements which it said had delayed 2,942 megawatts in new solar and wind projects.

“We have had confirmation from NERSA that an expedited investigation into whether Eskom is in contravention of its licence, has now commenced,” said Brenda Martin, chief executive of SAWEA.

Some of the projects have been waiting for financial closure for more than two years and SAWEA estimates they would inject some 58 billion rand ($4.33 billion) of investment into the economy.

“Our primary intention is to achieve financial closure of power purchase agreements. It remains our hope that Eskom will comply with the legal framework for power purchase, so that penalties do not need to be imposed on Eskom,” Martin said.

An Eskom spokesman was not available for immediate comment.

($1 = 13.3800 rand)

(Reporting by Wendell Roelf; editing by Tiisetso Motsoeneng and Jason Neely)

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By Maya Nikolaeva and Julien Ponthus

PARIS (Reuters) – Societe Generale avoided a costly and potentially embarrassing court case on Thursday by agreeing to pay nearly 1 billion euros ($1.1 billion) to settle a long-running dispute with the Libyan Investment Authority (LIA).

France’s second-biggest listed bank reached an 11th-hour settlement over LIA allegations that trades were secured as part of a “fraudulent and corrupt scheme” involving the payment of $58.5 million by SocGen to a Panamanian-registered company.

“By settling this dispute … we avoid a long trial that would have demanded a lot of resources,” SocGen CEO Frederic Oudea told journalists on a results call, adding that the bank was now able to concentrate its energy on its main businesses.

A spokesman in Paris said SocGen was paying 963 million euros as part of the Libya settlement, which overshadowed a fall of 19 percent in SocGen’s first-quarter net income to 747 million euros which it posted on Thursday.

Asked if SocGen had taken any sanctions against employees or if any of its staff had left the bank as a result of the case, Oudea said “appropriate measures” had and would be taken, while SocGen added that it had apologised to the LIA.

The Libyan fund lost a high-profile case last summer against Goldman Sachs in which it tried to claw back $1.2 billion from the Wall Street firm relating to nine equity derivatives investments carried out in 2008.

The settlement also marks the end of proceedings against Libyan businessman Walid Giahmi who controlled Lenaida, the Panamanian-registered company alleged to have been paid by SocGen, which was dissolved in 2010.

“This is a complete exoneration of my client, who has been subject to serious allegations involving bribery and intimidation for the past three years,” Giahmi’s lawyer, Kathryn Garbett, head of fraud defence at Mishcon de Reya, said, adding that her client was relieved the case was over.

U.S. TALKS NOT OVER YET

While significant, the Libyan settlement does not mark the end of SocGen’s legal woes, with the bank still in talks with U.S. authorities over dollar transfers it made on behalf of entities based in countries subject to economic sanctions.

Oudea, who is seeking to turn the page following a series of legal disputes and scandals so that he can focus on a new strategic plan under a new management structure, said those discussions would continue for at least several months.

“Among French banks, SocGen is the only one that does not seem to be able to get rid of recurring reputational problems,” analysts at Kepler Cheuvreux, who kept a “buy” rating on SocGen, said.

SocGen shares were down 0.4 percent at 1030 GMT following the results, which came a day after BNP Paribas, France’s biggest bank by market capitalisation, beat forecasts with higher first-quarter profits.

(Additional reporting by Claire Milhench in London and Jean-Michel Belot in Paris; Editing by Sudip Kar-Gupta/Greg Mahlich/Alexander Smith)

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(Reuters) – Financial services group Old Mutual Plc’s UK asset management business reported its higher ever quarter for client inflows and funds under management for the first three months of the year, citing increased demand for its services and platform.

Old Mutual Wealth forecast that markets would remain volatile and challenging in the medium term, especially until the outcome of Britain’s June general election and more detail of the terms of the country’s exit from the EU were known.

The business’s net client cash flows, excluding Old Mutual Italy and the South African branches, rose 59 percent to 2.7 billion pounds ($3.5 billion) in the quarter ended March 31.

Its comparable funds under management jumped 6 percent to 122.3 billion pounds, Anglo-South African parent Old Mutual said in a statement on Friday.

“We have the right solutions for these uncertain times, particularly our multi-asset, absolute return and high alpha product ranges… We are hopeful that this momentum will continue throughout 2017,” the unit’s CEO Paul Feeney said.

In March, Old Mutual said it was on track to complete its break-up into four parts by the end of 2018, although improvements to IT systems at Old Mutual Wealth could take longer and cost more than expected.

($1 = 0.7752 pounds)

(Reporting by Esha Vaish in Bengaluru; Editing by Adrian Croft)

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By Ahmad Ghaddar and Ahmed Elumami

LONDON/TRIPOLI (Reuters) – Libya’s Sharara oilfield has restarted after the end of protests by an armed group that had blocked pipelines there, National Oil Corp (NOC) chairman Mustafa Sanalla said on Thursday.

No details were immediately available about output at the field, which has a production capacity of nearly 300,000 barrels per day (bpd).

A Libyan oil source and a local official had earlier told Reuters production had resumed at the field, which is operated by state oil firm NOC with Repsol, Total, Norway’s Statoil and OMV.

Traders said the field restarted early on Thursday.

The oil source said El Feel oilfield, with a capacity of about 90,000 bpd, had also restarted. El Feel and Wafa field condensate make up the Mellitah blend which is exported from Mellitah terminal operated by NOC and Italy’s ENI.

Sanalla, speaking on the sidelines of an industry event in Paris, said Libyan oil production was about 491,000 bpd on Thursday and NOC hoped to reach 800,000 bpd soon.

He said NOC still planned to reach a production target of up to 1.1 million bpd by August, a goal that will receive a boost from the resumption of output from Sharara.

NOC said in a statement later it had agreed to lift a force majeure on Sharara oilfield, and production at the field would reach 200,000 bpd. It was not immediately clear when the lifting of the force majeure would come into effect.

El Feel oilfield production would reach 80,000 bpd, it said.

News about restarting Sharara and El Feel weighed on crude prices, pushing Brent crude futures around 1.5 percent lower to $51.04 a barrel at 1645 GMT. Investors are worried by oversupply in the market.

Oil security in Libya remains fragile and attempts to negotiate with groups that periodically block and close down pipelines to make political demands have fallen through in the past as rival factions compete for power.

Mohamed Almahdi Alnajeh, a member of the local Zintan region elders council, told Reuters it had reached a negotiated deal with the group blocking the Sharara pipeline to end the protest. The protesters were told to take demands to NOC, he said.

The Sharara blockade was the latest in a series of disputes. Protesters blocked a pipeline leading from Sharara in March. The protests ended in early April but resumed a week later, halting NOC’s plans to raise production there to 270,000 bpd.

Libya’s oil production has been hit by protests, Islamist militant attacks and fighting among rival military factions since the fall of Muammar Gaddafi in 2011 sent the country spiraling into turmoil.

Before the civil war, Libya produced 1.6 million bpd.

(Additional reporting by Julia Payne in London and Alex Lawler in Paris; Writing by Patrick Markey; Editing by Edmund Blair and Mark Potter)

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JOHANNESBURG (Reuters) – South Africa’s state-owned airline South African Airways cancelled at least 32 flights on Wednesday and has said that number could grow because of a cabin crew strike.

Cabin crew at SAA went on strike in early hours of Wednesday over pay, the main union at the state-owned carrier said, disrupting domestic flights and international flights.

Twenty eight of the flights cancelled were destined for domestic destinations within South Africa, while the rest were external flights, a South African Airways (SAA) official said.

The carrier also said some flights had been delayed.

“We’re talking about a substantial amount of revenue that has been lost in only half a day,” SAA spokesman Tlali Tlali said in a video posted on the eNCA television channel’s Twitter feed.

“We’re hoping to get labour to sit down with us … so we can get everyone back to work, so that in the evening we are able to operate our international and regional flights,” Tlali said.

The South African Cabin Crew Association (SACCA) said its nearly 1,400 in-flight staff would stop work indefinitely.

SAA said the strike had delayed flights out of O.R. Tambo Airport in Johannesburg, which handles around 19 million passengers a year, and would also affect flights from its coastal airports.

Zazi Nsibanyoni-Anyiam, president of the SACCA union, told Reuters that the workers, who represent around 80 percent of SAA’s cabin crew, had not received pay increases for six years.

“We will be here until the company puts an offer on the table. We think what we are asking for is reasonable,” Nsibanyoni-Anyiam said from a picket outside O.R. Tambo Airport.

SAA, which is technically insolvent and reliant on government debt guarantees of almost 20 billion rand ($1.52 billion), has been singled out by rating agencies as a threat to the country’s credit status, which was recently downgraded to “junk” by two of the big-three ratings agencies.

($1 = 13.1375 rand)

(Reporting by Mfuneko Toyana; Editing by James Macharia and Jane Merriman)

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LONDON (Reuters) – Tanzanian gold producer Acacia Mining will have to review its mining operations if the government’s ban on gold and copper ore exports remains in place, a senior executive said on Thursday.

Shares in Acacia, which is majority owned by Barrick Gold, briefly touched a six-week low, paring losses by 0900 GMT to trade down 3.7 percent after it said first-quarter core profits rose 25 percent to $82 million but cashflow was reduced by $36 million in part due to the ban.

The government halted the export of unprocessed ore on March 3, following President John Magufuli’s call for the construction of more gold smelters in the country, Africa’s fourth-largest gold producer.

“If we get to a point where it’s a pure stalemate and we don’t see that dialogue there, then we are going to have to re-appraise,” Chief Financial Officer Andrew Wray told Reuters, adding that negotiations continued.

“We are making contingency plans in the background of what we would need to do if we can’t resolve this.”

Non-essential spending in the quarter was pushed back in response to the ban and the company would have to “really take stock if it makes sense to continue producing given the cash burn”, Wray said.

The company has offered to fund a study on whether it could afford to build a smelter in Tanzania after a study in 2011 found there wasn’t sufficient ore volume in the country to justify it.

The export ban effects two of its three mines and the company said it would reassess the ongoing operation of both operations “over the coming weeks”.

“Clearly the message to the government is to sort this out or people are going to lose jobs (and the government royalties),” Investec analysts said in a note.

The company is also facing a tax audit and VAT refunds have not been received.

Acacia’s gold production in the first quarter totalled 219,670 ounces but sales were lower by 34,926 ounces.

However, Tanzania’s biggest gold producer stuck to its full-year production targets, as its mines continue to operate normally and stockpile its ore while negotiations continue with the government.

Acacia said in February it expects production this year to be between 850,000-900,000 ounces, up from about 830,000 ounces last year.

A technical committee appointed by President Magafuli is expected to report back in the next few days, Wray said.

(Additional reporting by Sanjeeban Sarkar in Bengaluru; Editing by Greg Mahlich)

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