Financial News in South Africa 2nd December:
1. SAA to take steps ensuring its survival:
AA will go through a “radical restructuring process” to ensure its survival, the department of public enterprises said on Sunday. It’s not clear whether government agreed to an urgently needed R2 billion bailout, but said that “SAA cannot continue in its current form”.
2. Santam and Hollard no longer cover SAA tickets:
Santam and Hollard have withdrawn their insolvency cover benefit on SAA tickets.
In its statement, Santam said the action was triggered by a decision by TIC’s international re-insurer to withdraw cover “based on the worsening risk outlook and potential bankruptcy” of SAA.
Spokesperson of Hollard, Warwick Bloom, confirmed on Saturday, that the insurance group similarly withdrew the insolvency cover benefit on SAA tickets. The withdrawal was effective from Friday. “We have only withdrawn that part of the cover, the other benefits still apply,” he said.
3. Tongaat Hulett institutes civil claims:
Tongaat Hulett will institute civil claims against former top executives, including its ex-CEO, and has been in contact with the National Prosecuting Authority and the police over misstatements in its financial reports.
This comes after the JSE-listed company received the results of a six-month forensic probe into its finances carried out by PwC, the same company that conducted a forensic probe into Steinhoff.
PwC was asked to conduct the probe by the group’s CEO, Gavin Hudson, after the company received credible allegations of financial wrongdoing via its internal whistle-blowing line.
Tongaat said the PwC Report will not be made public, as it is subject to legal privilege and other confidentiality restrictions.
4. Data on economy released tomorrow:
Tomorrow we will know whether the economy shrank in the third quarter. Most economists expected that the GDP expanded – but not by a lot.
5. Investec announces split on Monday:
Investec announced details of its split on Friday: Investec shareholders are set to receive one share in Ninety One (formerly Investec Asset Management) for every two held in the Investec group. The new firm will be listed in March.