Africa

The business rescue plan for the furniture arm of failed South African lender Abil has realised a better cash position than had been earlier hoped, administrators said in a report. The retailer with debts adding up to around 1.3 billion rand ($115 million) was forced into business rescue last year, which allows for temporary protection from creditors, as parent African Bank Investments (Abil) crumbled under bad debts.

The International Monetary Fund said Thursday it will provide a total of $100 million in debt relief and another $160 million in low-interest financing for the three West African countries hardest hit by the Ebola crisis, The Wall Street Journal reported. The deadly Ebola epidemic has slammed the economies of Guinea, Liberia and Sierra Leone as the health disaster slashed state revenues and crisis costs overwhelmed the governments’ budgets.

Angola has dramatically slashed its budget for the year and is reaching out to the World Bank and international lenders for at least $1bn in loans as Africa’s second-biggest oil producer and one of the continent’s star economic performers grapples with the fallout from the collapse in crude prices, the Financial Times reported. Luanda has already approached Goldman Sachs and Gemcorp Capital LLP, a small London-based investment firm set up last year, for loans of $250m from each institution. Both groups declined to comment.

One of Zimbabwe's smaller banks, owned by a senior minister in President Robert Mugabe's government, has surrendered its licence because it was insolvent and had a high level of non-performing loans, two sources at the bank said on Thursday. Unlisted Allied Bank, majority-owned by Transport Minister Obert Mpofu, has been struggling to meet capitalisation requirements and volunteered to close.

The personal hospitality business may be the most obvious sector of Sierra Leone’s economy that has been decimated by Ebola. After all, the main slogan in Freetown, the capital, these days is A.B.C. — avoid body contact. But all across the most affected nations — Sierra Leone, Guinea and Liberia — Ebola continues to lay waste not just to immune systems but also to balance sheets, the International New York Times reported.

Administrators implementing a rescue plan for African Bank Investments'(Abil) furniture business Ellerine have so far failed to find bidders for the bulk of the assets, they told creditors in an update on Friday, Reuters reported on Saturday. Failure to dispose off assets could potentially reduce the amount creditors can expect to receive after the business that owes nearly 1.3 billion rand ($118 million) is wound down fully. Ellerine was forced into a business rescue process -- similar to chapter 11 bankruptcy in the U.S.

South Africa's competition watchdog on Wednesday gave Lewis Group preliminary approval to purchase more than 60 stores from failed furniture firm Ellerine, paving the way for a $8 million deal that is expected to save nearly 400 jobs, Reuters reported. The Competition Commission said in a statement it would recommend that Lewis, which sells furniture and appliances to lower-income shoppers, be allowed to acquire 63 shops operating under the Beares brand as long as there were no job cuts. Approval from the commission is the first hurdle under South African law.

Four of South Africa's biggest banks are owed $53 million by Ellerine, the money-losing furniture firm that African Bank Investments (Abil) cut funding to just before the lender collapsed, documents showed, Reuters reported. The debt reflects the extent to which Abil's failure in August has rippled across corporate South Africa, knocking credit ratings, investor confidence and even hurting small suppliers such as florists and panel beaters.

South Africa will sacrifice economic expansion in the next two years by limiting spending growth and raising more taxes as it seeks to avoid a debt trap, Bloomberg News reported. The government will cut its expenditure limit by 25 billion rand ($2.3 billion) and plans 27 billion rand of “structural increases” in revenue in the period, the National Treasury said in the mid-term budget released in Cape Town today. “We have reached the turning point,” Finance Minister Nhlanhla Nene told reporters before his budget speech to Parliament.

Portugal's Novo Banco -- the successor to bailed-out Banco Espirito Santo (BES) -- has moved closer to a rescue deal for its Angolan unit, with the African nation's central bank agreeing a recapitalisation plan for the local business, Reuters reported. Novo Banco will retain a 9.9 percent stake in BES Angola (BESA) under a deal which will see some of its loans to the unit converted into equity, the National Bank of Angola said on Monday.