South Africa

Pravin Gordhan, South Africa’s third finance minister in less than a week, insisted on Monday that the government was committed to fiscal discipline as he sought to reassure investors following days of extraordinary turmoil that wiped billions of dollars from the value of the nation’s equity and bond markets, the Financial Times reported.

South Africa's Evraz Highveld Steel and Vanadium will defend its business rescue proceedings in court against British parent Evraz , the company said in a statement on Friday. The South African steelmaker, seeking protection from creditors after heavy losses due to cheap imports from China, said East Metals AG and Mastercroft S.A.R.L had instituted court proceedings to have a vote by creditors earlier this month declared invalid. Both are subsidiaries of the London-listed parent company, which acquired the South African steelmaker in 2008.

South Africa’s central bank governor has given warning about emerging market turbulence if volatility over the Chinese economy continues, but has ruled out any intervention to prop up a weak rand. The South African Reserve Bank (Sarb) surprised analysts on Monday when it released a statement on currency volatility, saying it “may consider becoming involved in foreign exchange markets to ensure orderly market conditions”.

Evraz Highveld Steel and Vanadium has a "reasonable prospect" of recovering despite closing operations and possibly cutting jobs, the South African steelmaker's business rescue team said on Wednesday, Reuters reported. The company, which last week pulled the plug on its South African iron operations, citing a lack of working capital and saying at the time it planned to stop its steel plant, has been in business rescue proceedings for three months to protect it from creditors.

Failed unsecured lender African Bank (Abil) has offered R1.65bn to junior creditors in a restructuring plan agreed on Thursday that may please some investors who had not expected to get anything back, Business Day reported. Abil collapsed under a mountain of bad debt in August last year, forcing the government to appoint external administrators to oversee a restructuring that includes carving out a "good bank" using its healthy assets worth R26bn. Junior creditors, which rank behind other creditors when a company or bank fails, had claims on Abil totalling R4.4bn, the bank said.

Administrators of the furniture arm of failed lender African Bank Investments said on Tuesday creditors were paid 14 percent of what they were owed by Ellerine Furnishers, which had debts of around 1.3 billion rand ($109 million), Reuters reported. Administrators Matuson Associates said they paid out 14 cents for each rand owed, higher than the previously anticipated 13 cents per rand. Ellerine was forced into business rescue last year, which allows for temporary protection from creditors, as parent African Bank Investments crumbled under bad debts.

Failed South African lender African Bank Investments Ltd (Abil) is lending at levels below what is required to set up a new "good bank" using its healthy assets, administrators said on Tuesday, Reuters reported. The bank collapsed under a mountain of bad debt in August, forcing the government to appoint external administrators to oversee a restructuring that includes curving out a "good bank" using its healthy assets worth 26 billion rand ($2.2 billion).

A deepening power crisis that has triggered almost daily outages across South Africa, hitting key industries as well as households, has forced the government to sharply downgrade its growth forecast for the year, the Financial Times reported. Nhlanhla Nene, the finance minister, highlighted energy supply as the government’s critical challenge as he projected that growth for the year would be 2 per cent, down from the 2.5 per cent the Treasury forecast in October.

South Africa recorded its worst economic growth in five years in 2014 as Africa’s most developed economy counted the cost of a wave of strikes, infrastructure bottlenecks and fragile business confidence, the Financial Times reported. An unprecedented five-month wage strike in the platinum mining sector, followed by a weeks-long strike by more than 220,000 metalworkers and engineers, dragged growth down to 1.5 per cent for the year. Mining and manufacturing however rebounded in the fourth quarter, with the economy expanding 4.1 per cent on a quarter-on-quarter basis.

The business rescue plan for the furniture arm of failed South African lender Abil has realised a better cash position than had been earlier hoped, administrators said in a report. The retailer with debts adding up to around 1.3 billion rand ($115 million) was forced into business rescue last year, which allows for temporary protection from creditors, as parent African Bank Investments (Abil) crumbled under bad debts.