Africa

South African retailer TFG said on Thursday it planned to raise 3.95 billion rand ($229.66 million) through a rights offer to lower its debt and protect its balance sheet, as profit fell by 1.1% in the year to March 31, Reuters reported. TFG, which also operates in Australia and Britain, said the proposed rights offer was fully underwritten by a syndicate of banks comprising three of its largest lenders, and its major shareholders have shown support.

The South African Reserve Bank will resist calls to finance the government’s growing budget deficit with aggressive quantitative easing because that could add even more strain on the National Treasury, Governor Lesetja Kganyago said, Bloomberg News reported. If the central bank were to buy 500 billion rand ($29 billion) of government bonds and then mop up the excess liquidity by issuing bonds at the current repurchase rate of 3.75%, it would be insolvent in about a year, Kganyago said in an online lecture Thursday.

Sasol Ltd. is reining in oil expansion and considering job cuts as part of ongoing efforts to turn the business around and protect itself from market downturns, Bloomberg News reported. The overhaul at the South African company follows a 50% slump in its shares this year as oil’s crash strained finances already pummeled by cost overruns at a giant U.S. chemicals project. Now it’ll focus squarely on its core chemicals and synthetic-fuels divisions as it seeks to boost cash and bring down debt.

African countries may get debt relief from China more easily than private creditors amid a global push to blunt the economic impact of the coronavirus pandemic on poor nations, a Johns Hopkins University study shows, Bloomberg News reported. China has written off $3.4 billion and restructured or refinanced about $15 billion of debt in Africa over the past decade without slapping penalties or seizing assets from borrowers, it said.

South Africa’s state-owned agricultural lender Land Bank is close to finalising a liquidity and debt restructuring plan after it missed loan repayments this year and had its credit rating cut, it said on Wednesday, Reuters reported. A statement from the company said that the plan under discussion with lenders and the National Treasury is intended to raise a 3 billion rand ($174 million) liquidity facility from lenders and extend terms of all debt maturing in the next 12 months.

Developed nations are considering financial support for a plan to relieve African countries of debt payments without triggering default, according to the United Nations committee steering the initiative, Bloomberg News reported. The debt-swap deal would channel payments due this year on international bonds back to the African nations, helping them fight the coronavirus and its economic impact.

The South African government would need to find at least 10 billion rand ($580 million) in new bailout funds if it wants to rescue South African Airways (SAA) with most of its routes intact, a long-delayed rescue plan showed, Reuters reported. State-owned SAA’s longstanding frailties have been exacerbated by the COVID-19 pandemic, which has pushed even previously profitable airlines into financial distress. SAA suspended commercial passenger flights in March, when the government imposed one of Africa’s strictest coronavirus lockdowns.

South Africa made it clear it wasn’t seeking any type of debt suspension to fight the coronavirus pandemic, with such measures likely hurting more than they would help due to the high domestic ownership of securities, BloombergQuint reported. “There are a few countries, such as Egypt and South Africa, that aren’t among those” seeking to be involved in debt standstill talks being coordinated by the Institute of International Finance, special envoy Trevor Manuel said in response to emailed questions.

Air Namibia grounded all international flights not already wiped out by the coronavirus after the country’s president, Hage Geingob, said the state carrier should be liquidated, Bloomberg News reported.

Emerging economies have raised more than $83bn through the international bond market since the beginning of April, just weeks after a push by the G20 to offer many poorer nations debt relief, the Financial Times reported. Data collated by the Institute of International Finance, an industry association, show that developing economies are financing their coronavirus-driven deficits by accessing the global financial markets, rather than by attempting to restructure their existing borrowings.