Edcon Holdings Ltd. agreed to sell part of South African clothing chain Edgars to a private equity-backed regional rival, potentially safeguarding a 91-year-old brand and saving thousands of jobs, Bloomberg News reported. Administrators led by Lance Schapiro and Piers Marsden struck a deal with Retailability Pty Ltd., a holding company for brands Legit, Beaver Canoe and Style, which owns 460 stores across southern Africa. Details of the transaction will be finalized based on further agreements, the business-rescue team said today.
Resources Per Country
Justin Bgoni, chief executive of the Zimbabwe Stock Exchange, received an unexpected call from a colleague last month: The government had decided to shut down the world’s best performing stock market, the Wall Street Journal reported. Until the suspension, announced June 26 in a tweet from Zimbabwe’s information ministry, the all-share index on the Harare-based exchange had jumped 677 percent since Jan. 1, even as local economists expect gross domestic product to shrink by more than 10 percent.
Steinhoff International, battling the fallout from a massive accounting fraud, faces legal claims amounting to more than 9 billion euros ($10.10 billion), the South African retailer’s annual report showed on Wednesday, Reuters reported. The report for the year ended September 2019 listed numerous court cases with claimants seeking more than 9 billion euros in payments or damages. It also included Steinhoff’s annual results, with the retailer’s full-year loss widening to 1.8 billion euros from a 1.2 billion loss a year earlier.
Government debt burdens across sub-Saharan Africa are rising at a faster pace and to higher levels than elsewhere in emerging markets, heightening the risk of further rating downgrades and defaults, ratings agency Fitch warned on Tuesday, Reuters reported. Emerging markets have been battered by the fallout from the coronavirus pandemic, with a coinciding oil price rout adding to the pain for smaller and often riskier developing countries, many focussed on crude exports and having few fiscal or monetary buffers.
South Africa’s Department of Public Enterprises announced its withdrawal from a panel that was established to facilitate talks with the troubled national airline’s workers about its planned overhaul, accusing three labor unions of undermining its work and putting jobs at risk, Bloomberg News reported. South African Airways was placed into a form of bankruptcy protection six months ago after a succession of managers failed to restore it to profitability and Finance Minister Tito Mboweni urged an end to repeated bailouts.
Zambia’s newly-formed creditor group is encouraging the government to bring a planned debt overhaul under the scope of an International Monetary Fund bailout, to help put the nation’s public finances on a sound footing, Bloomberg News reported. The government in Lusaka should vet its reform plans with the Washington-based fund and unlock aid to help finance projects to support an economic recovery, according to a representative of investors holding about a third of the nation’s dollar bonds.
The global health and economic crises gripping Africa are hurtling the region into its first full recession in a quarter of a century. Economic growth in Africa, which had been forecast at 3.2 per cent, is now expected to be between zero and 1.0 per cent, according to the UN Economic Commission for Africa, the Financial Times reported in a commentary. The crisis highlights the needs for urgent economic and financial measures to help soften the blow. The G20’s decision to suspend debt service for the poorest countries will help. But Africa’s needs are much bigger and urgent.
A vote on a restructuring plan for loss-making South African Airways (SAA) was delayed until next month on Thursday, after some creditors and trade unions secured an adjournment after months of wrangling over the airline’s future, Reuters reported. The administrators, who took over SAA in December after almost a decade of financial losses, published their restructuring plan last week and now expect the vote to take place on July 14.
Holders of Zambia’s Eurobonds are squaring up for what is likely to be a complex and lengthy debt-restructuring process. A group of lenders owning about a third of the nation’s dollar bonds, and in contact with another third, have formed a committee to negotiate with the government, Bloomberg News reported. Newstate Partners LLP will advise the creditors, who didn’t disclose who they were. Lazard Ltd. is representing Zambia. Zambia is looking to overhaul as much as $11 billion in foreign debt as part of efforts to unlock emergency funding from the International Monetary Fund.