South Africa’s biggest lenders raised $322-million in new loss-absorbing debt to comply with a central bank framework designed to ensure failing financial institutions can be recapitalised without taxpayer bailouts, Bloomberg News reported. Absa Group Ltd. raised R3.2-billion through the new instruments that are known as funding for loss-absorbing capacity, or FLAC, notes, the lender said in a statement Friday. They’re linked to Zaronia, the reference rate for short-term financial contracts that the central bank is introducing to replace the Johannesburg interbank average rate by year-end.
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Cell C is officially no longer technically insolvent, according to the company’s first financial results since its listing on the Johannesburg Stock Exchange, BusinessTech.co.za reported. Cell C is one of South Africa’s largest mobile operators, but has faced extreme challenges over the last decade. The company was acquired by Blue Label Telecoms in an extremely complex transaction amid the operator’s severe financial difficulties. For several years, the company was technically insolvent, meaning that its liabilities exceeded its total assets.
Tongaat Hulett, a 134-year-old South African sugar maker, is on the brink of collapse again as its administrators prepare to place the firm into provisional liquidation, MoneyWab.co.za reported. The joint practitioners for business rescue have applied to the High Court to discontinue their proceedings and place Tongaat into provisional liquidation after exhausting all reasonable options, the company said in a statement on Thursday. The move follows the collapse of the approved rescue plan after the sale agreements with its strategic partner Vision Group lapsed, it said.
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Police are describing the daylight shooting of South African insolvency lawyer Bouwer van Niekerk as a "deliberate hit," IOL.co.za reported. Van Niekerk was killed in the boardroom of his Saxonwold, Johannesburg office on Friday. The 43-year-old was at the time of his death reportedly working on high-profile cases, including a major insolvency case linked to an alleged Ponzi scheme. According to police spokesperson Dimakatso Nevhuhulwi, nothing was stolen.
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The South African Reserve Bank cut its main repo rate by a quarter percentage point to 7% on Thursday, as inflation remains low in the midst of continuing global uncertainty, the Wall Street Journal reported. The decision continues the cutting cycle begun in September when the bank started to reduce rates from a 15-year high of 8.25%. Headline inflation in South Africa was 3% in June, up slightly from 2.8% in May, but at the bottom of the SARB’s target range of 3% to 6%. If inflation remains around 3%, SARB Gov.
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Walk down the aisles of a Trader Joe’s or Whole Foods Market in the U.S., and chances are many of the piles of oranges, lemons, limes and grapefruit will be labeled “Produce of South Africa,” Bloomberg reported. They have become a staple in the U.S. — the world’s largest citrus importer — especially during the off-season summer months when in the southern hemisphere the South African winter harvest is at its peak. But now, those supplies are threatened by a potential 31% tariff President Donald Trump has slapped on the country.
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South Africa is considering offering additional incentives to automakers to help cushion the impact of U.S. President Donald Trump's tariffs on cars, Trade, Industry and Competition Minister Parks Tau said on Thursday, Reuters reported. "What we're currently considering is the possibility of expanding the automotive industry production plan so that we're able to mitigate the impact in our industry," Tau said in an interview with radio broadcaster Power FM.
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South Africa’s central bank paused its easing cycle while it assesses the impact US President Donald Trump’s trade policies may have on inflation, Bloomberg News reported. The monetary policy committee maintained the benchmark interest rate at 7.5%, Governor Lesetja Kganyago told reporters at a briefing north of Johannesburg on Thursday. That matched the median estimate of 21 economists in a Bloomberg survey, in which 14 predicted the hold and the rest expected a cut.
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South Africa's largest airline, FlySafair, has been given a year to reduce its foreign shareholding, or it risks having its license suspended, Business Insider Africa reported. If the airline fails to meet the deadline of a year from Jan. 23, it will be required to appear before the Domestic Air Services Council to explain why its license should not be revoked, according to a statement from the Department of Transport on Wednesday.
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