In this edition of Ghost Bites:

• Remgro finalises the Mediclinic restructure
• South32 gets out of the aluminium sector

Remgro finalises the Mediclinic restructure (JSE: REM)

They are now the 100% owner of Mediclinic Southern Africa

As you may recall, Remgro has been busy executing a transaction to swap the exposure to Mediclinic’s European operations (Hirslanden) for 100% ownership of the Southern African business.

This is because Remgro’s partner in the Mediclinic buyout, MSC Mediterranean Shipping Company, would prefer to own the European assets. Remgro is only too happy to be control the assets in a region they fully understand, so it makes sense for both parties.

The deal has now met all conditions precedent and has been implemented as of 1 July 2026.

They essentially did it as a straight swap that put a baseline value on each region of $950 million. With subsequent balance sheet adjustments, the prices ended up being $947 million for Mediclinic Southern Africa and $1.077 billion for Hirslanden.

Other than loan account movements, Remgro has received a dividend of $130 million to equalise the difference.

Ghost Bite: Focus is a good thing. I don’t think South African investors are overly interested in a Swiss hospital group, so Remgro can now focus on generating strong returns from the Southern Africa business that local investors do actually care about. But what do you think?

South32 gets out of the aluminium sector (JSE: S32)

This transaction makes a lot of sense

South32 certainly kept the wheels of SENS grinding on Wednesday. The company released no fewer than five announcements! A few of them are just administrative in nature, but there are a couple of big ones as well.

I’ll begin with the Sierra Gorda announcement, which confirms that the joint venture will invest in the fourth grinding line project. When this project is eventually commissioned in FY30, it will increase copper equivalent production by around 30% vs. current levels. They also expect a 10% reduction in average operating unit costs.

To get there, the joint venture needs to invest $275 million from FY27 to FY30, with an expected internal rate of return above 20% (subject to copper prices). The profit will be funded from operating free cash flow and joint venture debt facilities.

We then reach the bigger news, which is the sale of aluminium value chain assets to Alcoa for up to $5.6 billion. That’s a chunky number!

The assets in question include Worsley Alumina, Hillside Aluminium, the MRN bauxite mine, the Brazil Alumina refinery and the Brazil Aluminium smelter. Mozal Aluminium is excluded from the transaction, mainly as it is sitting in care and maintenance due to an inability to secure energy at a suitable cost.

Alcoa Corporation is a US-listed company that has deep pockets, so they can afford to part with $3.1 billion in up-front cash for the deal. They will also issue $1 billion in shares to South32. Alcoa will assume $750 million in debt and lease liabilities. Finally, there is a contingent cash consideration of up to $750 million based on alumina and aluminium prices until 2030.

The pricing implies a through-the-cycle EBITDA multiple of 6.8x and an annual average free cash flow multiple of 12.7x. That seems like a strong exit value.

This is a really important deal for South32, as it means that 85% of post-deal EBITDA will be from base and precious metals (copper / zinc / silver / lead). It gives them more balance sheet flexibility to invest in assets like the Taylor project and the aforementioned Sierra Gorda project.

The market certainly liked it, with the share price closing 11.3% higher on the day.

This coincides with the transition in the group CEO role, with Graham Kerr stepping down and Matt Daley taking the role. Daley certainly inherits a more focused strategy than before. The copper story will come through strongly in the next few years.

Ghost Bite: Mining is tricky for many reasons, with an ongoing choice between being a focused producer with choppy earnings vs. a more diversified player with smoother earnings (in theory). But when you have various core assets that need capital at the same time, you have to pick your battles.

Results of previous poll:

Nibbles:

• Director dealings:
  • A non-executive director of ASP Isotopes (JSE: ISO) sold shares in the company worth over R10 million.
  • Three prescribed officers of Alexander Forbes (JSE: AFH) received share awards. Only one them elected partial cash settlement to settle the tax, with the other two choosing full cash settlement. This is equivalent to selling an entire share-based award. The total value across those two officers was nearly R8.8 million (including the taxable portion).
  • A non-executive director of Sibanye-Stillwater (JSE: SSW) bought shares worth R539k.
  • A director of a major subsidiary of Stefanutti Stocks (JSE: SSK) bought shares worth R157k.
  • Here’s an unusual one: an associate of the CEO of Spear REIT (JSE: SEA) sold shares worth R66k. His family has been a net buyer of shares for longer than anyone can remember. Perhaps this is just a blip.
  • If there’s one thing Afrimat (JSE: AFT) doesn’t need right now, it’s clerical sloppiness. I was very surprised to see that a director of the company had sold almost R81k worth of shares at these depressed prices. It turns out that the announcement was wrong and that the director had bought that many shares. That certainly makes more sense.

• Riskowitz Capital Management recently sent Trustco (JSE: TTO) a Section 189 demand for a shareholders’ meeting. They want shareholders to consider the appointment of a new board of directors. Trustco had no choice but to comply, with the meeting scheduled for 18 August. This shareholder battle has been going on for ages now. Let’s see what happens this time.

• Powerfleet (JSE: PWR) has announced a share buyback programme of up to $30 million. They will execute this over the next 24 months.

• Primary Health Properties (JSE: PHP) has refinanced its debt with a new term loan and revolving credit facility to the value of £800 million. This will be used to partially refinance the £1 billion bridging facility obtained by the company to execute the Assura transaction in 2025. The credit margin on the new facilities varies by tranche, but will be on average 40 basis points cheaper than the debt being repaid.

• In 2025, PPC (JSE: PPC) announced that they were selling land in Zimbabwe that is held by the company’s subsidiary in that country. With a price tag of $30 million, it would be a meaningful cash injection. Alas, despite efforts to save the deal by extending the long stop date, it has now lapsed due to the purchaser’s inability to make payment by the correct date. PPC will still look to sell this land, so new buyers are welcome!

• The chairperson at Bytes Technology Group (JSE: BYI) is stepping down, having served in that role since the company listed in 2020. Gavin Rochussen will be the new chair, bringing experience in the asset management and family office space to the role. Bytes has been through a horrible period in recent years. Let’s hope things improve for them.

• Shuka Minerals (JSE: SKA) announced another set of drilling results from the Kabwe Zinc Mine. As usual, it’s all Greek to anyone who isn’t a mining engineer or geologist. It seems like this was a deep hole that has given them a lot of information to plan further drilling. That sounds positive overall.

• In the naughty corner with late submissions of annual reports, we find Mantengu (JSE: MTU), Visual International (JSE: VIS), Brikor (JSE: BIK) and Copper 360 (JSE: CPR). The JSE has fired a warning shot to these names. If they don’t release by the end of July, their listings may be suspended.

• Kibo Energy (JSE: KBO) is also late with its financials under the AIM rules in London, but this is because they are negotiating terms for a potential reverse takeover transaction. They will update the market on timelines as soon as possible.