Africa

Leaders of the world’s largest economies ratcheted up the pressure on tax avoidance by backing “an ambitious and comprehensive” plan to crack down on multinationals that shift profits into low-tax countries, the Irish Times reported. The G20 countries also stepped up the assault on evasion, with plans to exchange tax information automatically between themselves by the end of 2015 and calling “on all other jurisdictions to join us by the earliest possible date”.

Banks face being hit with a new set of international capital rules aimed at forcing bondholders rather than taxpayers to bail out failing institutions, the Financial Times reported. Global regulators are seeking support from world leaders to draw up proposals to force banks to hold a minimum amount of debt that can be “bailed in” if a bank collapses.

South Africa's Investec, Nedbank and Sanlam said on Thursday they had exposure to a failing building supply company First Strut, whose chairman was shot dead in June, Reuters reported. Trade in First Strut's 925 million rand ($95 million) worth of bonds was suspended last week following an application to place the firm in liquidation, according to a stock exchange filing. Its chairman, Jeff Wiggill, was found dead with a bullet wound to his head next to a luxury Bentley automobile in the early hours of June 20 in the Soweto township that borders Johannesburg.

The Asset Management Company of Nigeria, which holds non-performing assets of troubled banks, said it had named Citigroup and Africa-focused investment bank Vetiva Capital to manage the sale of its shares in one nationalized bank, Reuters reported yesterday. Nigeria fully nationalized Afribank, Spring Bank and Bank PHB in 2011 when they failed to find new investors before a recapitalization deadline. It then recapitalized them and changed their names to Mainstreet, Enterprise Bank and Keystone Bank, respectively.

Finance ministers from the Group of 20 leading nations plan to launch a new phase of the international crackdown on corporate tax avoidance this week even as UK business leaders are warning their government to resist “radical new solutions” to profit shifting by multinationals, the Financial Times reported. Britain has taken a lead in pressing for reform of the international tax rules after a wave of public anger over the low tax bills paid by some large multinationals.

Cement producer AfriSam on Tuesday successfully completed a years-long restructuring programme that reduced its overall debt by more than R15-billion, Engineering News reported. The group, which faced a significant debt burden and almost defaulted on billions of rand of debt over a year ago, now had a sustainable long-term debt solution to the overgearing that resulted from the acquisition transaction that created AfriSam. The total debt remaining on the balance sheet could not be confirmed, but previous reports had indicated that it could be about R6.5-billion.

A surge in personal loans, credit-card debt and overdrafts in South Africa has regulators sounding the alarm, and many of the country's banks are beginning to dial back lending amid fears that Africa's largest economy is nearing a dangerous credit bubble, the Wall Street Journal reported today. Unsecured lending has nearly tripled in South Africa in the past four years to $44 billion, or 10.5 percent of total credit, according to the central bank.

The Kenyan government has approved a restructuring plan to bolster the operations of stricken fixed line operator Telkom Kenya, Standard Digital reports. The new proposals include the recapitalisation of the firm via a KES10 billion (USD115.6 million) cash injection from co-owners France Telecom-Orange (FT-Orange) and the government of Kenya. Other plans include the writing-off of around KES30 billion worth of shareholder loans by FT-Orange and a retrenchment of the company’s ‘bloated workforce’.

One of South Africa's two satellite networks last week filed for "business rescue," a new legal mechanism designed to save and rehabilitate distressed companies rather than liquidate them, The Deal Pipeline reported. That goal may be worthwhile. But the limitations of the concept were manifest over the weekend when domestic carrier 1time Airline abandoned a similar attempted business rescue and said it will file for provisional liquidation. Both cases cast popular light on South Africa's attempts at a Chapter 11-like approach to insolvency.

Indebted miner Great Basin Gold on Thursday said it was to acquire a $35-million loan by order of the British Columbia Supreme Court, following its Companies Creditors Arrangement Act (CCAA) filing made on Wednesday, MiningWeekly.com reported.