South Africa

A prominent South African fund manager stands to become one of the biggest losers on a batch of New Look’s bonds that were in effect rendered worthless when the UK retailer launched a debt restructuring this week, the Financial Times reported. New Look set out terms of a debt-for-equity swap on Monday that will hand one-fifth of the company to so-called senior secured bondholders — owners of debt linked to specific assets. Meanwhile, holders of £176m of unsecured bonds have been offered just 2 per cent of the equity in the struggling fashion retailer.

Sibanye Gold Ltd. said a protracted strike at its South African gold mines may hurt earnings at a time when the producer remains under pressure to reduce debt, Bloomberg News reported. Thousands of workers started a strike in November over pay, and there’s inconsistent output at three mines amid limited operations, spokesman James Wellsted said, without saying how many workers are showing up. Sibanye is assessing the impact on its finances, he said. While the strike won’t force a restructuring of the affected mines, there could be a review if the impact is severe, he said.

Absa Group Ltd. is having a hard time convincing some investors it can win back the market share lost while under the control of Barclays Plc. South Africa’s third-largest lender was once the leading retail bank with over 10 million customers and more mortgages on its books than any of its Johannesburg-based peers, Bloomberg News reported. Now, released from the shackles of London-based Barclays, Absa Chief Executive Officer Maria Ramos can take on more risk with a plan to grow revenue faster than her main rivals from 2019 to 2021.

Mozambique's former finance minister, Manuel Chang, has been arrested in South Africa at the request of the United States, a police spokesman said on Monday. Chang, who was in charge of Mozambique's finances when it guaranteed $2 billion in secret borrowing by state-owned firms in 2013 and 2014, was arrested on Saturday in Johannesburg, the International New York Times reported on a Reuters story. "He is wanted by the U.S.," police spokesman Vish Naidoo said.

Edcon Holdings Ltd. said lenders extended waivers to give the debt-laden South African retailer time to implement a recapitalization plan that was approved by its board, Bloomberg News reported. “The restructuring and recapitalization of Edcon has passed its next hurdle,” Chief Executive Officer Grant Pattison said in an emailed statement on Friday.

Troubled low-cost African carrier Fastjet Plc said on Thursday it had enough cash to operate until Dec. 21 and that it had met the conditions for an open offer and equity refinancing to raise funds, Reuters reported. The company in September announced a fundraising and equity refinancing aimed at increasing its equity base by at least $40 million, which will give the airline enough working capital until the end of 2019. The airline said it had cash balance of $7 million as of Wednesday, of which $6.5 million was restricted cash held inside Zimbabwe.

Amid rising fears that the South African economy is stuck with low growth, major financial institutions along with the South African National Treasury have cut their 2018 growth forecasts for Africa’s most industrialised economy, the Financial Times reported. One of numerous issues the government is facing is the financial health of Eskom, South Africa’s state-owned monopoly power utility company. The company’s semi-annual results announced on November 28 highlight just how daunting this issue is.

South Africa faces no choice but to assume some of the debt of its troubled power utility, Eskom Holdings SOC Ltd., said Martin Kingston, the chief executive officer of Rothschild & Co.’s operations in the country, Bloomberg News reported. The state-owned company has incurred debt of 419 billion rand ($29 billion), which it is struggling to service, and inadequate spending on maintenance of its power plants has led to a series of scheduled power cuts this month, potentially harming economic growth.

South Africa’s financial regulator is investigating seven trading accounts that sold Steinhoff International Holdings NV shares in the weeks leading up to the global retailer’s disclosure of accounting irregularities and subsequent share-price collapse a year ago, Bloomberg News reported. The accounts belong to individuals, trusts and corporate entities and the Financial Sector Conduct Authority is looking for evidence of insider trading, it said in a statement Friday. The probe is close to completion.

Eskom Holdings SOC Ltd. should consider selling two coal-fired plants that rank among the world’s biggest to repair the state-owned utility’s finances, according to the head of South Africa’s biggest bank by market value, Bloomberg News reported. The supplier of almost all of South Africa’s power is being battered by declining sales, high fixed costs, surging debt and unplanned outages that are holding back economic growth. Its two new power plants, Medupi and Kusile, are still unfinished after a decade of construction.