Another day, another drama at Ascendis. This one has been brewing for a while, as a group of shareholders including Carl Neethling (of Acorn Private Equity fame) has demanded a shareholders' meeting under section 61(3) of the Companies Act. They collectively hold 11.01% in Ascendis. The purpose of the meeting would be to appoint three directors as non-executives to the board. Ascendis is consulting with its lawyers regarding the proposed appointments and any impact these may have on the recapitalisation process and the current rights of its lenders. The fun never seems to end with this company.
After 58 rounds of bidding, MTN has acquired a total of 100MHz in the spectrum auction and will pay R5.2 billion in the process. MTN notes that this compares favourably with global averages. This is the first time in around 17 years that spectrum h as been released on a permanent basis in South Africa and increases MTN SA's total permanent spectrum holdings from 76MHz to 176MHz. The spectrum has been allotted for a 20-year period. This spectrum will be used to expand 4G and 5G connectivity and enhance overall coverage.
Glencore is selling its CSA copper mine in Australia for USD1.05 billion in cash, a USD50 million equity stake in the purchaser and a 1.5% net smelter return life of mine royalty upon completion of the deal. This is in line with Glencore's strategy to focus on lower-cost, long-life assets.
If you have an unusual fetish for European tax law, NEPI Rockcastle's redomicile from the Isle of Man to the Netherlands (via Luxembourg) may excite you. In all other cases, it probably won't. The rationale for this complicated transaction is to move the corporate home of the company into the European Union. The initial step of redomiciling to Luxembourg is necess ary because Dutch law doesn't permit non-EU companies to migrate directly into the Netherlands. In summary: lawyers and tax advisors will be making a lot of money from this.
York Timber has released a trading statement covering the six months to December 2021 and it doesn't make for pleasant reading. HEPS may be between 45% and 51% higher than the comparable period but stripping out the adjustments to the values of the biological assets tells a different story. Core earnings per share less the fair value adjustment will be around half of the previous period's result and cash generated from operations will be between 37% and 42% lower. Simply, this means that the trees are worth more than a year ago whilst still in the ground, with the benefits of generating cash from them having gone backwards over the past year.
Raven Property Group specialises in commercial property in Russia, a business model that is now about as des irable as owning a season ticket to go stand in queues at Home Affairs. Due to the sanctions on Russia, the company cannot access funds from Russian subsidiaries and cannot possibly quantify the eventual impact on its business. Raven has been wiped out by the invasion and subsequent sanctions and the company is proposing to sell its properties to Pristino Investments, a Cypriot company to be owned and controlled by the management team in Russia. If this goes ahead, Raven's economic interest in the portfolio would be retained via existing unsecured loans and non-voting preference shares in the portfolio. In addition, the listings of the ordinary and preference shares would be cancelled. This is a prime example of the risks of operating in a single geography, although these are extraordinary circumstances that have led to this outcome.
RFG Holdings has released a trading update for the 22 weeks ended February 2022. Group revenue increased by a whopping 15.2% on a comparable basis (excluding the extra trading week but including one month's worth of the Today pie business that was acquired). Margins were under pressure due to increased input costs (e.g. tin plate in food cans) and price increases are proving to be difficult to put through to retailers.
British American Tobacco has closed an offering of $2.3 billion in notes. These are debt instruments and the proceeds will be used for general corporate purposes, as this is part of the standard funding strategy of the company. This is a good example of how capital structures are put together. There's a $1 billion tranche due in 2028 and priced at 4.448%, a $700 million tranche due in 2032 and priced at 4.742% and a $600 million tranche due in 2052 and priced at 5.650%. If you've ever wondered what a "yield curve" looks like in practice, now you know.
Randgold & Exploration Company (that really is the name) has released a trading statement for the year ended December 2021. Although there is still a headline loss, it has decreased by between 39% and 59% thanks to reductions in operating expenditure.
Labat's deal to acquire 75% of Leaf Botanicals has been cancelled as the product was found to be sub-standard. The acquisition of Sweetwaters in the Eastern Cape has been finalised, which enables Labat to accelerate the delivery on its off-take agreement with a Swiss pharmaceutical group.
Montauk Renewables has released results for the year ended December 2021. Revenue increased by 4% but EBITDA only increased by 1% and HEPS swung from a profit of $0.03 per share to a loss of $0.02 per share.
InceConnect will keep you busy for a while this morning. I recommend another cup of coffee.
Have a magnificent long weekend - I'll be spending it in Knysna with Mrs Ghost, our first trip away together in over 2 years!
The Finance Ghost
