News in South Africa 16th March:
1. Eskom owed R35.2bil by government:
Eskom said municipalities owed it R35.2 billion and it wanted its money.
The power utility presented the state of its systems at Megawatt Park on Monday.
CEO Andre de Ruyter said illegal connections also threaten to cause explosions and fires due to overloading.
“As of 31 January this year, municipalities owed Eskom an amount of R35.2 billion, which is an unsustainable situation.”
Eskom said it was in continuous talks with government to recover money owed by municipalities and the power utility had met with various stakeholders under the guidance of Deputy President David Mabuza.
The power utility said that it was working with government to get the money back, moving into districts in arrears to help install prepaid metres, assist with collection, and implementing ‘load reduction’ in areas where the system is overloaded due to illegal connections.
2. FSCA launches probe into Huge Group:
The Financial Sector Conduct Authority (FSCA) has launched a probe into trading in telecoms company Huge Group following a complaint by a US-based investment advisor. It is reported that there is “unusual trade activity” in Huge’s shares in December 2020 – weeks before the company announced a plan to buy software producer Adapt IT was flagged. The company started buying its own shares in the week leading up to the announcement.
South African telecom company Huge Group offered to exchange each Adapt IT share for 0.9 Huge share, which works out to a value of 552c per share – 33% more than the share’s average price over the past month.
In response, Adapt IT issued a neutral statement on Thursday, saying Huge’s offer was “unsolicited” – indicating that the board won’t necessarily support the takeover.
Adapt IT’s share price jumped by 13% in reaction to the bid, while Huge declined by almost a percent on Thursday – indicating that the market believes the bid may go ahead, says Chantal Marx, head of investment research and content at FNB Wealth and Investments.
3. Student protests continue:
Student protests in South Africa continue, after the government dug in its position that there is simply no money to write of billions of rands’ worth of historic debt, and provide free education.
Student leaders said they are not backing down from their demands, and have promised to render university districts ‘ungovernable’. Protests are expected to continue for the rest of the week, with students threatening to continue for the rest of the month until demands are met.
The scene of a deadly shooting last week, when father of four Mthokozisi Ntumba was killed by rubber bullets from police firearms, the streets around Wits University were on fire again on Monday, with reports of a student being injured in clashes with the cops. Roads around the University of Johannesburg (UJ) were also barricaded with burning tyres and rocks.
4. Yuppiechef bought by Mr Price:
Mr Price will buy 100% of 15-year-old SA kitchenware group Yuppiechef in a deal worth around R470 million.
The company says that the deal will give Mr Price “the opportunity to access the skills of a highly talented team and service a new customer base”, while Yuppiechef will benefit from Mr Price’s financial strength to “accelerate growth plans which include significantly broadening the product assortment into areas where we have well-established skills and expanding its physical presence beyond the currently limited number of stores”.
Mr Price CEO, Mark Blair, said: “We are very excited about welcoming the Yuppiechef team into our family. As a
founder-led business, they share our entrepreneurial roots and we are eager to jointly realise the company’s
“We are partnering with a market leading business which has won numerous awards relating to both e-
commerce and stores, and Yuppiechef has a proven ability to launch private label categories which have also
attracted industry recognition.”
The purchase consideration, which represents approximately 1% of market capitalisation, will be settled in cash.
The targeted effective date is subject to the fulfilment of both regulatory and commercial suspensive conditions
which includes competition authority approval.
The Yuppiechef management team will continue to run the business with the full support of the groups executive team.
5. Police under attack:
Police came under attack during raids on illegal shebeens over the weekend, prompting national police commissioner General Khehla John Sitole to launch a 72-hour activation plan to bring the attackers to book.
Two incidents took place in Gauteng and North West and one police officer was injured, Sithole said.
On Friday at around 02:00, a police officer stationed at the Garsfontein police station in Pretoria was severely assaulted by residents of the Plastic View informal settlement during an operation to close illegal shebeens. The officer was admitted to a local hospital, where he received multiple stitches to open head wounds.
Police minister Bheki Cele has told officers to defend themselves with ‘deadly force’. One person was killed by police during student protests this past week after being shot with rubber bullets.