The US market is trading ~40% above fair value. What could cause those lofty valuations to deflate? This week on No Ordinary Wednesday, Chris Holdsworth, Chief Investment Strategist at Investec Wealth & Investment International, unpacks the key findings of Investec’s latest Global Investment View, highlighting risks for global investors and where opportunities lie outside the US.
This includes Europe loosening fiscal policy to support growth, China rolling out stimulus, with commodities rallying in response, and South African equities remaining cheap with commodities and improving SOEs providing tailwinds.
Hosted by seasoned broadcaster, Jeremy Maggs, the No Ordinary Wednesday podcast unpacks the latest economic, business and political news in South Africa, with an all-star cast of investment and wealth managers, economists and financial planners from Investec. Listen in every second Wednesday for an in-depth look at what’s moving markets, shaping the economy, and changing the game for your wallet and your business.
Africa Bitcoin Corporation and core investment Altvest Credit Opportunities Fund released numbers (JSE: BAC | JSE: BACC)
At least they have fresh numbersfor the capital raise
Africa Bitcoin Corporation, previously Altvest, has been busy with a lot of things lately. Still, it’s disappointing that the trading statement for the six months to August 2025 came out on the same day as results were released. I’ll say it again: trading statements are meant to be early warning systems. I’m somewhat more forgiving of smaller companies, particularly when they’ve been snowed under with corporate actions, but it’s still not good enough.
We can skip the starter and go straight to the main course, as we have detailed results to work with rather than the trading statement. The company has thrown absolutely everything behind the bitcoin branding at group level and you’ll see that everywhere in the reporting. Gone is the Altvest style of branding that so much effort (and money) was put into. Personally, I think they should’ve just introduced a new class of shares for the bitcoin endeavours, as the entire structure was perfectly set up for that approach.
If you read the executive chairman commentary, you’ll see that the group is focused on two things: (1) building the bitcoin holdings over time, and (2) deploying capital to SMEs through the Altvest Credit Opportunities Fund (ACOF). There’s no shortage of ambition, with a dream of growing from the current level to having a top 100 market cap in Africa within 5 years. They plan to raise R3.8 billion over the next 3 years. Aim for the stars, hey.
Back down on earth, there’s a long way to go. You might be forgiven at this point for forgetting about Umganu Lodge (a sideways NAV story) and Bambanani Family Group (which can only dream of a sideways NAV). There’s little reason for investors to pay much attention to the A and B shares that represent these assets respectively, so don’t feel too bad about forgetting.
The C shares are a lot more interesting, as they give access to ACOF. ACOF is still losing money at an alarming rate. Although it is early in its J-curve journey, I was hoping to see a stronger improvement in the unit economics in this period. Profit before impairment and operating expenses (i.e. net of funding costs) increased from R2 million to R9.6 million, but operating expenses jumped from R10.3 million to R16.9 million. I don’t really understand why that would be necessary at this point. This means that the net loss for the period before tax was R14.6 million vs. R17.2 million in the comparable period. With ACOF looking to raise equity capital, they really needed to show a better rate of improvement in the underlying economics. Just how viable is it to lend at SMEs at such competitive rates?
Despite such a modest decrease in the loss, the valuation of ACOF has jumped from R163 million to R253 million. You can decide for yourself if that sounds reasonable.
Although Africa Bitcoin Corporation reported a profit at group level, this is thanks to the fair value gains on investments. In other words, you have to be comfortable with the incredibly spicy uptick in value in ACOF to feel good about this performance:
I’ve always appreciated the very constructive and candid approach that the top management at the company have taken in their engagements with me. But my concerns remain high and my money remains uninvolved in this story. The main thing I was looking for was a sign of vastly improved unit economics in ACOF. Perhaps it will come in the next period.
Curro has released the deal circular and expects to delist by December (JSE: COH)
This is truly a landmark deal in South Africa
The Jannie Mouton Stigting (Foundation) currently holds 3.36% of the shares in Curro. As we know from following Curro in recent years, there are a number of factors that led to an incredibly disappointing outcome for shareholders vs. the high hopes that the market had for the group a decade ago. Recognising the role that Curro plays from a societal perspective, the major players involved decided that Curro would be more suited to being a Public Benefit Organisation (PBO) rather than a for-profit company that is expected to show annual growth.
This is effectively a social enterprise approach, as Curro is certainly capable of washing its own face and doesn’t need handouts. The challenge is that the business model just isn’t appealing enough to investors, which is why the share price has been under so much pressure. This could’ve led to strategies that could be damaging to the core ethos of the business, like a reduction in capital expenditure at the schools.
Despite much of the ill-informed and often malicious commentary I’ve seen on social media, what we have here is an exceptional example of a billionaire (and those running his family legacy) stepping up and doing the right thing. Instead of trying to buy Curro at a cheeky price, the scheme of arrangement is priced at R13 per share, a 53% premium to the 30-day VWAP. It will be paid with a combination of cash and shares in Capitec (JSE: CPI) and PSG Financial Services (JSE: KST) – two of the best companies on the local market. If this trade was about the money, there is no world in which any profit-motivated party would swap Capitec and PSG Financial Services exposure for Curro. It’s like trading your Ferrari for a Fiat.
Incredibly, the fees related to the transaction add up to less than R2 million. This has to be one of the most efficiently priced schemes I’ve ever seen, with the advisors perhaps recognising the broader rationale and stepping up accordingly.
Bravo, Jannie Mouton and everyone involved.
eMedia Holdings is buying 30% in Pristine World Holdings (JSE: EMH | JSE: EMN)
There’s some clear momentum at the company
Someone seems to have lit a fire under their you-know-whats at eMedia Holdings. This company usually has fewer SENS announcements than reruns of Anaconda on eTV, but that changed recently. The Remgro (JSE: REM) deal injected capital into the business and significantly improved the liquidity of the N shares with a wider shareholder base after the unbundling by Remgro. People are suddenly talking about eMedia!
The positive momentum isn’t going to waste, with the company announcing the acquisition of 30% in Pristine World Holdings, an offshore company that focuses on providing visual effects services to the global film and television markets. Combined with further investment by eMedia in its visual effects studios in Hyde Park, the group will provide clients with the opportunity to use virtual advertising and will enhance its current productions.
The 30% stake will change hands for $6.9 million, or roughly R119 million. That’s certainly not a small deal, especially for a significant minority position rather than a controlling stake. The net asset value (NAV) of Pristine is $22.9 million, so they are paying basically paying the NAV. We only have a net profit number for 9 months rather than 12 months, with no indication of seasonality in the business, so all I can do is annualise the 9-month number to arrive at indicative annual net profit of $2.48 million. This puts the deal on a P/E of roughly 9.2x, which feels like a big number for a non-controlling stake.
It’s possible that earnings are weighted towards the final quarter of the year, but then why don’t they say that in the announcement? And if there isn’t any seasonality, then I struggle to understand the pricing of this deal.
Orion Minerals has increased the capital raise (JSE: ORN)
They seem to be enjoying strong demand from institutional investors
Orion Minerals recently announced an all-important funding deal with Glencore (JSE: GLN). This really kicked the company into a higher gear, with the market believing that things are finally happening.
This is of course an excellent backdrop to capital raising activities, with Orion taking full advantage of the demand in the market. They initially planned to raise around R57 million (the number makes more sense in Aussie dollars than in rands) from “sophisticated and professional investors” – i.e. not a retail raise open to the public. The raise is now up to R89 million thanks to the level of demand for the shares, so that’s rather encouraging.
Prosus is ready to Just Eat (JSE: PRX | JSE: NPN)
It’s time for the European strategy to be demonstrated
Prosus announced that the offer for Just Eat Takeaway.com is unconditional. The deal can now be closed, with 90.13% of the shares in Just Eat Takeaway.com committed to the offer. Remaining shareholders can still accept the Prosus offer until 16 October.
This is going to be the first really big test for Prosus CEO Fabricio Bloisi, as this deal has been conceptualised and executed under his watch. The thesis here is that Prosus can unlock growth in the tepid Western European markets using AI, with the recently announced acquisition of La Centrale in France following a similar theme.
I really like the Just Eat Takeaway.com deal, as it feels like Prosus pounced on this thing at the right time and at a decent price. All eyes are on execution now, particularly with the Prosus share price up 65% year-to-date. This is a chart that I’ve been very happy to own!
Trustco is on the wrong side of the JSE yet again (JSE: TTO)
How does this company expect to cope in the American regulatory environment?
Trustco has found itself in the naughty corner yet again, with the JSE imposing a public censure and a fine of R5 million on the company. The regulator doesn’t take this step lightly, so Trustco really managed to irritate them here.
How did this happen? Well, back in 2022, Trustco subsidiaries entered into a transaction with SBSL Investments that gave that company the option to subscribe for shares in Meya Mining. This was a category 1 transaction, which would require a circular and shareholder approval. According to the JSE, Trustco went ahead with implementing the deal across a couple of tranches anyway.
To make it worse, to date there is still no circular! The jokes about the company’s name truly do write themselves.
I must remind you that Trustco already has a poor relationship with the JSE and has made it very clear that they don’t want to be listed here. The grand plan is to be listed in the US instead. If Trustco treats the US regulators with the same disdain as the South African regulators, then they are going to have a very bad time.
Is R5 million enough for a company’s disregard of the rules for a circular? Personally, I don’t think so. The advisory fees alone would usually come to that number. The fine for non-compliance needs to be a lot higher than the cost of compliance, otherwise there isn’t a strong enough deterrent.
Nibbles:
Director dealings:
I take a somewhat asymmetrical view on director share awards. For example, a director of AVI (JSE: AVI) was awarded shares and sold only the taxable portion, but I don’t really see this as a “buy” because the director didn’t need to put additional cash in. But when a director sells an entire award i.e. not just the taxable portion, it’s a proper “sale” in my books because the director would rather have cash than shares. This was the case for a director of an AVI subsidiary, with a sale to the value of R570k. Director dealings are ultimately only useful for their signalling value to investors, so my approach is based on the typical intent behind the various types of transactions. You may of course have a different view on this!
While on this topic, I should mention that I always ignore partnership matching schemes, in which directors get to buy shares in a subsidised manner (like at British American Tobacco – JSE: BTI). I also ignore situations in which multiple directors simply reinvest their dividends in shares, as we often see at Anglo American (JSE: AGL). Again, it’s all about how strong the signal actually is. These are weak buy signals that are more linked to employment and remuneration than a view on where the share price is currently trading.
And now we arrive at a director dealing that is actually useful, being the CEO of Santam (JSE: SNT) buying shares worth R317k.
Buy signals are by far the most useful form of director dealings, but we should never ignore sales, especially of chunky amounts. A prescribed officer of Standard Bank (JSE: SBK) sold shares worth R3.5 million.
Finally, we get to an off-market purchase that is clearly some kind of negotiated transaction rather than anything else. An associate of the non-executive chairman of Burstone (JSE: BTN), Moss Ngoasheng, has agreed to acquire a whopping R499.99 million worth of shares in an off-market deal. Quite why it is just below R500 million, I really don’t know. The price is R9 per share and the current traded price is R8.05.
If you’re a shareholder in Supermarket Income REIT (JSE: SRI), you’ll be interested in the fact that the fund has declared a dividend for the July to September period of 1.545 pence per share. There’s no scrip dividend alternative, so all shareholders will be receiving the dividend in cash. The exchange rate for South African shareholders will be announced on 20 October.
Telemasters (JSE: TLM) will pay its dividend of 0.2 cents per share (yes, just 0.2 cents per share) on 24 October. Try not to spend it all at once.
If you’re keen to catch up on Southern Palladium (JSE: SDL) and the company’s investment thesis, you can check out the presentation they did in Sydney.
Old Mutual Private Equity (Old Mutual) is to exit its 2018 investment in Medhold to Sanlam Private Equity (Sanlam). In operation since 1988, Medhold is a leading supplier of medical devices in Southern Africa. Its product range comprises critical healthcare devices including anaesthetic delivery systems, orthopaedics, robotic assisted surgery, minimally invasive surgery, patient monitoring, cardiology, maternal infant care, infection control, surgical workspaces and electro-surgical equipment. Financial details were not disclosed.
As part of its strategy to diversify and strengthen its revenue streams within its existing ecosystem, eMedia has announced the acquisition of a 30% strategic equity stake in Pristine World. Pristine World is beneficially owned by UAE’s Convergence IT Services and is a specialist provider of visual effects services catering to the global film and television and commercial markets. eMedia will pay US$6,92 million (R119,1 million) for the stake which will be funded out of existing cash resources and available facilities.
Remgro via its joint venture Pembani Remgro Infrastructure Fund II has invested US$20 million in Kenyan Internet Service Provider (ISP) Mawingu. The capital injection will be used to scale its long-term expansion strategy which aims to impact one million people across the continent by 2028.
Prosus subsidiary OLX has purchased La Centrale in an all cash €1,1 billon deal from Providence Equity Partners. La Centrale is an online French vehicles classifieds platform, the acquisition of which will accelerate OLX’s European strategy to grow highly profitable marketplaces using best-in-class AI tools trusted by dealers and consumers. The deal marks OLX’s entry into Western Europe, giving it a foothold and an immediate leading position in one of Europe’s largest used car markets.
Finbond Group South Africa, a wholly owned subsidiary of Finbond is to acquire a 74% stake in Benefits Bouquet from Eclipto in a transaction valued at R116,3 million. Benefits Bouquet is a provider of services and benefits to consumers, ranging from discount coupons, credit and debt assistance, legal advisory services, financial assistance to trauma and HIV support. The deal will diversify Findbond’s revenue streams and increase the profitability of its South African operations.
Norfund, the Norwegian Investment Fund for Developing Countries, has acquired a 10% equity stake in Anthem, a newly created utility-scale renewable energy platform by African Infrastructure Investment Managers’ IDEAS Managed Fund (Old Mutual). The US$86 million investment by Norfund is alongside Mahlako Energy Fund, an investment and advisory firm owned 100% by Black South African women. The partnerships will drive the platform’s success to deliver c. 11 GW pipeline under the development of Anthem.
In a voluntary announcement KAL Group has advised of its disposal of Tego Plastics and Agrimark operations for an undisclosed sum. The disposal forms part of the company’s strategy to streamline its operations and focus on other segments of the group. It will however continue to purchase agricultural packaging products from Tego. Financial details were undisclosed.
In a move to head off the closure of ArcelorMittal’s local steel businesses, South Africa’s development finance institution, the Industrial Development Corporation (IDC), is said to be preparing to make a bid for the business. In an article published by News24, the IDC’s c.R8,4 billion bid would end two years of negotiations and pave the way for the entry of other international steel companies as the IDC plans to seek strategic investors to run the plants.
The acquisition by Prosus of Just Eat Takeaway.com (JET) is unconditional with 90.13% of shares tendered or irrevocably committed by the closing of acceptances on 1 October 2025. JET will be delisted from Euronext Amsterdam.
On 1 October 2025, the parties to the Barloworld transaction agreed to waive the Standby Offer Condition relating to the receipt of competition regulatory approval by COMESA. Accordingly, in light of the waiver, all Standby Offer Conditions have been fulfilled or waived and the Standby Offer has become unconditional. Shareholders who still wish to accept the Standby Offer have until Wednesday, 15 October 2025 to do so. Results will be announced on 16 October 2025.
Unlisted Companies
Global leader in digital business and technology services NTT DATA has acquired EXAH a local Salesforce Consulting Partner and AI implementation specialist. The acquisition will deliver an end-to-end Salesforce and AI delivery experience to customers across the Middle East and Africa region. Financial details were undisclosed.
Cape Town-based The PURA Beverage Company which manufactures, distributes, markets and sells “better for you” beverages, has secured a R260 million investment from an undisclosed global investment firm. The capital injection will be used to scale the company’s international footprint and business. The investment will be leveraged to accelerate PURA Soda’s market penetration across major retailers predominantly in the US.
Emira Property Fund has acquired a further 130,160,464 SA Corporate Real Estate (SAC) shares on the open market. The shares were acquired for an aggregate consideration of R400,8 million. Together with the SAC shares acquired in June this year, Emira now holds a total of 229,56 million shares equating to an 8.7% stake in the company.
Orion Minerals initially announced a A$5 million (R57 million) capital raising exercise but increased this to A$7,7 million due to level of demand. The private placement comprises the issue of c. 515 million shares at an issue price of 1,5 cents (R0.17) per share – the issue of which falls within Orion’s 15% capacity for issues of equity securities without shareholder approval. A further 66,67 million shares will be issued to Tarney Holdings, subject to shareholder approval in November 2025. The funds raised will be applied to continue early works at the Prieska Copper Zinc Uppers mine and to finalise optimisation studies and ongoing site works at the Okiep Copper Project.
Cilo Cybin, the Cannabis SPAC has transferred its listing from AltX to the General Segment of the JSE Main Board, effective 29 September 2025. The General Segment of the Main Board was launched last year and has seen over 30 companies migrate to this segment, the listing requirements of which are less onerous for the smaller cap firms, providing a flexible, supportive regulatory environment, enabling capital raising measures and significant cost savings.
This week Africa Bitcoin (formerly Altvest Capital) listed on the Namibia Securities Exchange, effective 2 October 2025. The secondary listing coincides with the company’s equity capital raise and allotment of up to 1 million ordinary shares.
Following the successful take private of Assura plc by Primary Health Properties plc, Assura will delist from the LSE on 6 October 2025 and from the JSE on 23 October 2025.
The JSE has advised shareholders that Sebata has failed to publish its annual report for the year ending 31 March 2025 as required by the JSE Listing Requirements and, as a result, the shares in the company have been suspended.
Labat Africa has failed to submit its annual report timeously and consequently trading of its shares on the JSE is under threat of suspension. The company has until 31 October 2024 to rectify the matter.
This week the following companies announced the repurchase of shares:
South32 continued with its US$200 million repurchase programme announced in August 2024. The shares will be repurchased over the period 12 September 2025 to 11 September 2026. This week 1,083,864 shares were repurchased for an aggregate cost of A$2,94 million.
On March 6, 2025, Ninety One plc announced that it would undertake a repurchase programme of up to £30 million. The shares will be purchased on the open market and cancelled to reduce the Company’s ordinary share capital. This week the company repurchased a further 150,000 ordinary shares at an average price 204 pence for an aggregate £305,670.
The purpose of Bytes Technology’s share repurchase programme, of up to a maximum aggregate consideration of £25 million, is to reduce Bytes’ share capital. This week 515,775 shares were repurchased at an average price per share of £3.92 for an aggregate £2,02 million.
Glencore plc’s current share buy-back programme plans to acquire shares of an aggregate value of up to US$1 billion. The shares will be repurchased on the LSE, BATS, Chi-X and Aquis exchanges and is expected to be completed in February 2026. This week 8 million shares were repurchased at an average price of £3.29 per share for an aggregate £26,3 million.
In May 2025, British American Tobacco plc extended its share buyback programme by a further £200 million, taking the total amount to be repurchased by 31 December 2025 to £1,1 billion. The extended programme is being funded using the net proceeds of the block trade of shares in ITC to institutional investors. This week the company repurchased a further 632,298 shares at an average price of £39.29 per share for an aggregate £24,84 million.
During the period 22 to 26 September 2025, Prosus repurchased a further 1,576,035 Prosus shares for an aggregate €90,7 million and Naspers, a further 75,461 Naspers shares for a total consideration of R451,3 million.
One company issued profit warnings this week: Wesizwe Platinum.
During the week one company issued or withdrew a cautionary notice: Hulamin.
West African private equity firm, Verod, has announced the successful exit from Nigerian pension fund administrator, Tangerine APT Pensions through a disposal to minority partner, APT Securities and Funds. Financial terms of the deal were not disclosed. In 2020, Verod acquired 100% of AXA Mansard Pensions Limited and 45% of APT Pension Fund Managers Limited. In 2021, the two businesses were merged to create Tangerine APT Pensions Limited.
Capital Alliance Private Equity IV announced its full equity exit of a 15.92% stake from Nigerian energy company Aradel Holdings. This transaction follows the successful listing of Aradel on the Nigerian Exchange in October 2024.
Norfund has announced that it is investing €20 million in Société Ivoirienne de Productions Animales (SIPRA), one of the largest locally owned and integrated poultry companies in West Africa. Headquartered in Abidjan, Côte d’Ivoire, SIPRA operates across the entire value chain – from feed production; breeding to processing and distribution with a strong regional presence (+150 outlets) in both Côte d’Ivoire and Burkina Faso.
Oscillate PLC has revised the terms of its acquisition of Kalahari Copper to include Kalahari Copper’s Namibian Copper Project, in addition to the previously announced Botswanan Copper Project. Oscillate made a non-refundable payment of £500,000 to Kalahari Copper, some of which will be allocated to work programmes and license renewals. Upon signing the share purchase agreement, Oscillate will issue shares equating to 30% of its outstanding shares as consideration. A cash payment of £2,0 million, increased from £1,5 million, will be made to the seller within 10 days of relisting on a senior exchange. Milestone payments of £1,5 million each will be due upon an initial Maiden JORC Resource, a Pre-Feasibility Study, and a Final Investment Decision for both the Botswanan and Namibian licenses.
Egyptian fintech, Sabika has a six-figure US$ investment led by M-Empire Angels. Sabika is a digital platform that provides secure, transparent, and Sharia-compliant gold and silver investment services. The investment will be used to enhance platform features, integrate AI-driven tools, and support Sabika’s expansion into the Saudi market in 2025.
Pembani Remgro Infrastructure Fund II has made a US$20 million investment in Kenyan Internet Service Provider (ISP), Mawingu. The investment will be used for Mawingu’s long-term expansion strategy, which aims to impact 1 million people across the continent by 2028 through a combination of acquisitions of local ISPs and the development of digital infrastructure in areas historically left behind due to high capital costs and geographic barriers.
The hidden tax trap of Section 8E of the income tax act
Capital structure is a critical consideration in M&A transactions. Excessive gearing (where a business is over-reliant on debt) can compromise the target company and/or the combined entity’s financial health, place management under undue pressure, and potentially derail a transaction.
Managing risk associated with an overly geared capital structure While debt is often more readily available in emerging or underperforming markets – and generally offers a lower cost of capital and no dilution of equity shareholding – it also introduces greater risk. An overreliance on debt can lead to capital structure imbalances, which may pose significant operational and financial challenges, including pressure on financial covenants. To mitigate this, acquirers often explore restructuring mechanisms such as converting debt into equity, issuing quasi-equity instruments, or refinancing existing debt. One commonly used instrument in this context is the preference share. These instruments are attractive due to their hybrid nature, offering features of both debt and equity. However, where such preference shares function more like debt, they may trigger reclassification under section 8E of the Income Tax Act, No. 58 of 1962, as amended, with significant tax consequences.
The section 8E tax trap
Section 8E was introduced to curb tax arbitrage where instruments are structured as shares but, in substance, behave like debt. It expands the definition of an ‘equity instrument’ to include any right or interest whose value is directly or indirectly derived from a share, ensuring that returns on debt-like shares are taxed in line with their economic substance.
Preference shares may fall within the scope of section 8E if one or more of the following criteria is met: *the preference shares are redeemable within three years (mandatory or optional);
*the preference shares carry a return of capital obligation within that period; or
*they pay dividends linked to interest rates or fixed timelines, rather than ordinary share performance.
Additionally, shares linked to restrictive financial arrangements or whose value is derived from similar instruments may also trigger section 8E.
So, what happens if section 8E applies?
*Any dividends declared on these instruments are treated as income in the hands of the recipient, and are subject to normal income tax rates and not the 20% dividends tax normally applicable to qualifying dividends for individuals (dividends declared to a SA tax resident company are exempt). *The issuer does not qualify for a tax deduction on the dividend paid. *The recipient is not entitled to any exemptions typically available for either dividends or interest.
The core principle behind section 8E is to align the tax treatment of preference shares with their underlying economic reality. If an instrument functions like a loan – despite being issued as a share – then its returns are taxed accordingly. This ensures a consistent and equitable tax outcome across similar financial arrangements.
To illustrate the implications, consider the following scenario: ABC (Pty) Ltd (ABC) issues R1m in redeemable preference shares to XYZ (Pty) Ltd (XYZ). The shares entitle XYZ to a dividend of 70% of the weighted average prime rate of 11.25%, payable quarterly. ABC may require XYZ to redeem the shares for their original subscription value within three years.
Year 1: *ABC pays XYZ dividends of R78,750 over the course of the year. Tax treatment:
*XYZ (the recipient): The R78,750 is taxed as income, not a dividend. No exemptions apply.
*ABC (the issuer): No dividends tax is due, and no deduction is available for the dividend payment.
Closing thoughts
Tax considerations in M&A extend far beyond compliance; they are fundamental to value preservation and creation. Where preference shares form part of the funding structure, particularly in a higher interest, post-COVID 19 environment, it is essential in any transaction to evaluate whether their use would fall within the ambit of section 8E.
Misclassification can significantly impact the post-tax return profile and, ultimately, the commercial viability of a transaction. Careful structuring, aligned with both legal form and economic substance, is key. Engaging tax specialists early in the process is not optional – it is a strategic imperative.
Sibongakonke Kheswa is a Corporate Financier | PSG Capital
This article first appeared in DealMakers, SA’s quarterly M&A publication.
The inherent dynamism of corporate life can lead companies to undergo transformations during their existence, and these changes inevitably carry significant legal consequences for the organisation and functioning of the company. Specifically, as part of its strategic vision, a company may decide to restructure in order to adapt to possible economic changes, remain competitive,1 and maintain or improve its market position. Among the various forms of restructuring is the merger.
Under OHADA commercial company law, a merger is defined as “the operation by which two or more companies come together to form only one, either by creating a new company or by absorption by one of them.”2 The Uniform Act on Commercial Companies and Economic Interest Groups (AUSCGIE) thus draws a traditional distinction between the creation of a new company by several existing ones (merger by formation of a new company) and the absorption of one company by another (merger-absorption).3
Although distinguished in Article 189 of the aforementioned Uniform Act, both types of mergers are governed by the same legal regime. The principal consequence of such a legal operation is the universal transfer of the assets and liabilities of the absorbed company to the absorbing company.4 As such, both the assets and liabilities of the absorbed company are transferred to the new or absorbing entity. Another legal effect is dissolution without liquidation: the absorbed company disappears in favour of the entity that acquires its assets.
This automatic and universal transfer raises the issue of contracts entered into intuitu personae with the absorbed company, particularly employment contracts that are still in force at the time of the merger. Given the principle of privity of contract set out in Article 1165 of the Cameroonian Civil Code, which states that “agreements produce effects only between the contracting parties and do not prejudice third parties,” one might be tempted to conclude that employment contracts would cease to have effect following a merger, as they were entered into based on the specific qualities, both objective and subjective, of the absorbed company and its employees.
However, Article 42 of the Labour Code provides otherwise: “Where there is a change in the legal situation of the employer, notably by succession, sale, merger, transfer, transformation of business, or incorporation, all employment contracts in force on the date of such change shall continue between the new employer and the company’s staff”. 5
Termination of such contracts can only occur under the terms and conditions laid out in this section.
(a) The above provisions shall not apply:
When there is a change in the company’s activity;
When the workers express, before the competent labour inspector, their wish to be dismissed with the payment of their entitlements, prior to the modification.
(b) The cessation of the business, except in cases of force majeure, does not exempt the employer from complying with the provisions of this section. Bankruptcy and judicial liquidation are not considered cases of force majeure.
The employment contract may, while in effect, be modified at the initiative of either party
a) If a substantial modification is proposed by the employer and rejected by the employee, any resulting termination of the contract shall be attributed to the employer. It shall be considered abusive only if the proposed change is not justified by the interests of the company. b) If a substantial modification is proposed by the employee and rejected by the employer, the contract may only be terminated by a resignation submitted by the employee.”
This article means that in the event of a merger, all employment contracts in force remain valid and are transferred to the new employer. As such, Articles 1165 of the Civil Code and 42 of the Labour Code appear to offer conflicting solutions, raising the question of which provision should prevail under Cameroonian law. The answer lies in a well-established civil law principle: special rules override general ones. Therefore, in accordance with this legal maxim, the fate of employment contracts in the event of a merger is their automatic transfer to the new entity.
This leads to the broader question of whether Cameroonian law effectively protects the parties to the employment contract during mergers. To address this issue, we will evaluate the protection offered both to the employee and the employer. While it is clear that the employee enjoys enhanced protection (1), this comes at the cost of a more limited protection for the employer (2).
1.Enhanced Protection of Employees in Corporate Mergers
Through Article 42 of the Labour Code, the Cameroonian legislator has clearly reaffirmed the principle of freedom of contract, which is central to Cameroonian labour law. As a result, employees are not passive victims of the merger of their employing company. Their employment contracts continue under the new employer, offering protection through continuity. This ensures that employees are not automatically dismissed as a result of these structural changes, and that their employment relationships are simply transferred to the successor employer.
Furthermore, the merger places a legal obligation on the absorbing company to uphold the contract under its previous conditions, thereby shielding employees from sudden professional instability.
Beyond ensuring job security, the legislator also allows workers to opt out of this continuity by requesting their dismissal and the corresponding entitlements. While these rights significantly protect employees during mergers, they also, however, dilute the protection available to the employer. 6
2.Weakened protection of employers in corporate mergers
In employer-employee relationships, the employer is generally seen as the dominant party. Consequently, in the context of mergers, despite the employer often being the primary beneficiary, their legal protection is weakened.
The employer’s economic activity is sacrificed on the altar of contractual freedom for the employee. The latter can choose whether or not to continue the employment relationship, whereas the employer is legally bound to continue executing contracts. Worse still, the employer must pay severance to any employee who chooses to leave.
It is difficult to anticipate the number of employees who may choose to leave during merger negotiations. Similarly, the employer may be forced to allocate a highly speculative budget for potential departures – an economically burden-some scenario.
A recent example in Cameroon illustrates this reality: Mediterranean Shipping Company reportedly lost 400 employees following the acquisition of Bolloré Africa Logistics’ operations, with the employees invoking Article 42 of the Labour Code. Such a situation inevitably leads to financial turmoil.
Call for a rebalancing of interests in corporate mergers
Given the above, the solution offered by the legislator in Article 42 of the Labour Code is not attractive for investors. In our view, lawmakers should consider introducing a merger indemnity to encourage employees to stay in their positions. 7
Employers should also leverage their creativity to implement incentive measures aimed at persuading employees to maintain their contractual relationship, and thus stabilise company operations. For instance, employers could involve employee representatives in the merger negotiations, to help avoid circumstances that could lead to mass resignations and thereby jeopardise business continuity.
Naturally, the elimination of certain roles, duplication of positions, and disruption to team cohesion can result in social tensions, which must be addressed through appropriate negotiations and measures to mitigate both their impact on employees and the risk of investment loss. Human resources remain a pillar of corporate survival and a guarantee of return on investment for the absorbing company.
Finally, the legislator could consider limiting employees’ rights to unilateral dismissal during mergers, in order to prevent the employer from being unduly penalised through excessive severance costs and organisational chaos, especially when the original goal was to enhance competitiveness.
Joelle Zeukeng Azemkeu is a lawyer at the Cameroon Bar Association and is an ILFA Alumni
R. Sy, Restructuring Operations of Commercial Companies under OHADA Law: The Case of Mergers, published on 26 June 2024, www.village-justice.com, accessed on 1 July 2025;
See Article 189 paragraph 1 of the Uniform Act on Commercial Companies and Economic Interest Groups;
B. Mator, Mergers of Companies under OHADA Law, Ohadata D-04-19;
Ibid.
This solution is identical under the labour laws of Niger, Burkina Faso, Mali and Chad. The Cameroonian and Nigerian versions are identical.
N. Ekome, Implications of Business Transfers on the Execution of Employment Contracts in Progress in Cameroon, www.village-justice.com, published on 11 July 2017, accessed on 2 July 2025;
In February 2023, in Cameroon, 400 employees of Bolloré Transport & Logistics requested to be dismissed under Article 42 of the Labour Code, following the transfer of the company’s African operations to Mediterranean Shipping Company; This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.
Barloworld waives the COMESA condition – and thus the offer is unconditional (JSE: BAW)
Regulators in Africa are the actual worst
Back in my advisory days, I remember the look on people’s faces in transaction meetings when there was even a small chance of a deal needing to go to COMESA for approval. There are 21 member states in Africa and you can just imagine how efficient their competition regulation process is. Deals will sit for months and months, if not longer.
I’m not a competition lawyer, so I’m not sure quite how Barloworld can do this, but they’ve agreed with the offeror to waive the condition for COMESA approval. This means that the offer is now unconditional, even though the COMESA issue is outstanding.
For those looking to sell their Barloworld shares to the offeror, this is good news. It means that the offer will be open for acceptance until 15 October and that the payment date will be in mid-October as well, provided that Barloworld gets through the remaining administrative processes smoothly (including the TRP compliance certificate).
Holders of 41.6% of the shares in Barloworld have accepted the offer thus far. Together with the existing shares held by the consortium and the Barloworld Foundation, this takes them to 65%. The question now is around just how close they will get to the magical squeeze-out number of 90%.
Capitec just cannot stop winning (JSE: CPI)
While most banks struggle for double-digit HEPS growth, Capitec just managed 26%!
If there are any Capitec bears left out there, they’ve gotten very quiet in the past year or two. Capitec’s business has evolved from unsecured lending into solid retail banking, followed by the introduction of new value-added services like Capitec Connect and now an additional core offering in the form of business banking. Each time Capitec takes a significant step forward in their service offering, the numbers tell a story of success. I wouldn’t like to be sitting at one of their competitors, wondering what they might do next.
As regular readers will know, I’m currently hosting a podcast series that tells the stories of entrepreneurs who bank with Capitec Business. I’ve therefore seen first-hand how Capitec is investing in its business bank and its clients, with authentic positive feedback from the entrepreneurs I’ve met. Honestly, I wouldn’t bet against them taking significant market share in this space, just like they did in the retail market. Business banking loans increased by 42% vs. personal banking loans at 32%, with business banking less than a quarter of the size of personal banking.
If we look at the group numbers for the six months to August 2025, net interest income grew 23% and impairments were up 17%, so net interest income after impairments jumped by 27%. It’s pretty hard for bank results to go wrong from there!
Capitec has impressive growth drivers that sit below that line, like value-added services up 36% and Capitec Connect that has more than doubled to a contribution of R165 million. There’s also a delicious 45% jump in the net insurance result, powered by 86% growth in funeral plan and life cover.
Net non-interest income grew 19%, so the most interesting thing about the story is that Capitec’s core banking operations are still growing ahead of the “juicy” stuff that is the only meaningful source of growth at most of the other banks. Capitec continues to eat the sector’s lunch.
Expenses were up 16%, so there’s not as much margin expansion as shareholders might have wanted to see. Capitec is in a growth phase and is investing heavily in its business, with the acquisition of AvaFin contributing 200 basis points of the growth in expenses. Still, with operating profit before tax up 26% and HEPS up 26%, I really don’t see much room for complaints. Return on equity has increased from 29% to 31%, putting it country miles ahead of its peers.
Gerrie Fourie has retired as CEO and he certainly went out on a high. The reins to the most impressive corporate story in South Africa have been passed to Graham Lee. Let’s see what he does with them!
SPAR is clearly struggling to maintain market share (JSE: SPP)
Is the franchise model going to find a way to claw things back?
SPAR is in the fight of its life. On-demand grocery retail is now part of our daily lives, with scooters everywhere on the roads. How often do you see the SPAR2U branding on one of them? Yeah, same here.
Omnichannel retail is difficult and requires incredible data access and integrity throughout the systems. Retailers need to know exactly what is on the shelf at the stores and how to access it, with Woolworths (JSE: WHL) and Checkers (part of Shoprite JSE: SHP) operating exclusively corporate-owned stores and thus having full visibility. Pick n Pay (JSE: PIK) is a mix of corporate-owned and franchise stores, so that makes things harder. SPAR is in the worst position of all, with a franchise model and so much independence baked into the culture that store owners aren’t even required to procure from SPAR as the wholesaler, let alone share shelf-level data!
Clearly, SPAR is on the back foot. And once you layer on all the management distractions and value destruction in Europe, you reach a point where SPAR makes incredibly embarrassing decisions like that one to open pet stores that sell live animals. It feels like none of the people behind that decision have ever been on social media or actually spoken to anyone involved in animal welfare. I genuinely cannot tell you when last I saw a chain store that sells live animals. People either adopt from shelters or they contact breeders, unless they go to specialist stores for pets like fish. Nobody (literally nobody) wants to see puppies for sale in a pet store when the shelters are full. Who signed that decision off?!?
Having backtracked on that daft plan with a dozen eggs on their faces (which were probably delivered by Sixty60 anyway), my main concern is that SPAR seems to be out of ideas. In a trading update for the 51-week period ended 19 September 2025, they note that wholesale growth in South Africa was 1.7% in the first half and 1.8% in the second half. Yaysies, how exciting.
The only growth engine is SPAR Health, up 13.7% and 12.1% respectively. Build it managed to shrink by 4.1% in the second half, almost perfectly offsetting the growth in the first half. In the Groceries and Liquor business specifically, the first half was 1.1% and the second half was 2.3%. Sure, there’s some momentum in Groceries and Liquor, but off such a low base in the first half.
What about Ireland, the offshore business that SPAR hasn’t had to pay someone to drag away? It was down 0.6% in the first half and up 2.2% in the second half.
Instead of wasting their time on trying to sell puppies and bunnies in new stores, SPAR’s management team should be living and breathing the biggest problem they face: competing with Sixty60. The share price has shed 31% of its value this year and it’s not hard to see why. The biggest frustration of all is that a great SPAR is genuinely great – my local SPAR is a perfect example of the incredible operators that sit underneath this thing. There’s so much potential here, but… puppies.
Nibbles:
Director dealings:
Here’s something to make us all feel poor: Pieter Erasmus shuffled some chairs around in his personal holding structure, which means that Pepkor (JSE: PPH) shares worth an incredible R482.4 million changed hands.
Neal Froneman, the retiring CEO of Sibanye-Stillwater (JSE: SSW), executed a collar hedge over shares worth R11.5 million. It’s also important to note that a prescribed officer (in this case a senior exec in Australia) sold shares worth R14.2 million.
The CEO of Argent Industrial (JSE: ART) sold shares worth R1.5 million.
The company secretary of eMedia Holdings (JSE: EMH | JSE: EMN) bought N ordinary shares worth R29k.
Although not a trade of shares, Astoria (JSE: ARA) announced that non-executive director Jan van Niekerk’s indirect shareholding in the company has increased from 6.18% to 10.33% due to various restructuring activities in his holding structure.
Orion Minerals (JSE: ORN) is firmly in exploration phase, so the financials aren’t as useful as they are for a company that has moved into the operating phase. Most of the commentary is around the definitive feasibility studies published earlier this year and the progress made since then. The operating loss for the year ended June 2025 was A$15.4 million, driven by exploration and corporate costs. Orion will announce the results of the placement to raise around R57 million on Thursday 2nd October.
PPC (JSE: PPC) is working towards getting the sale of land by PPC Zimbabwe done. PPC has an 88% stake in the Zimbabwe subsidiary and has been enjoying a much better performance in that country recently. The property is being sold for $30 million, so this is a chunky deal. The sale was announced in August, with the latest news being that PPC Zimbabwe and the purchaser have agreed that all the conditions will need to be met by 27 February 2026. That’s quite a long time, so hopefully it’s enough runway to get the deal done.
Thungela (JSE: TGA) announced that CEO-designate Moses Madondo will take the role of CEO with effect from 1 November 2025. Current CEO July Ndlovu will be on gardening leave from 1 November 2025 until 31 December 2025 when he formally steps down as a director. As an entrepreneur, I can only dream of annual leave. In top corporate jobs, gardening leave can sometimes be a reality if you get really lucky. What a thing that is – being paid to just sit at home (and do the garden)!
eMedia Holdings (JSE: EMH | JSE: EMN) confirmed that Remgro (JSE: REM) has now completed the unbundling of N ordinary shares as agreed. This means that Remgro’s shareholders now control roughly 3.4% of the voting rights in eMedia Holdings, as the N ordinary shares have 1 votes per share vs. the ordinary shares at 100 votes per share.
Occasionally, you see significant changes to the shareholder register on companies that are off the beaten track. It’s either something or it’s nothing, but it’s always worth being aware of in case you’re a shareholder. In this case, Mahube Infrastructure (JSE: MHB) announced that Bunter Capital and related parties now hold 5.1% in the company.
Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE.Disclaimer.
South Africa is rapidly emerging as a digital investing leader, driven by mobile-first platforms, financial inclusion efforts, and a tech-savvy population
Digital investing in emerging markets (EM) is growing twice as fast as in developed ones – and South Africa is punching above its weight. Technology is making long-term investing accessible to more people than ever before.
It’s worth asking: how can we accelerate this momentum of digital wealth creation in South Africa?
Globally, the digital wealth market is projected to grow from US$3.3 billion in 2024 to US$8.5 billion by 2032. In South Africa, the momentum is tangible. We score 65/100 on Amundi’s Digital Investor Global Index (DIGI) – above the global average – reflecting strong usage, portfolio weight, advice habits, and peer advocacy.
We’re entering an era where investing is no longer the preserve of the elite, but a path open to anyone with a smartphone and a plan. Platforms like SatrixNOW have helped make this possible by lowering costs and barriers to entry.
Emerging Markets Are Leading the Charge
Emerging markets are at the forefront of this shift. In Southeast Asia, the digital investment market is on track to surpass US$44 billion by 2025, fuelled by a rising middle class and near-universal smartphone adoption. Eastern Europe is following suit, with forecasts showing this market could exceed €412 billion by 2029.
Africa’s story is particularly compelling. Nearly half of the world’s mobile banking accounts are based on the continent. From Kenya’s M-Pesa to South Africa’s fintech evolution, mobile-first investors are bypassing legacy systems. A young, tech-savvy population, falling data costs, and affordable smartphones are accelerating uptake. Even global giants like BlackRock and Amundi are backing EM platforms that blend ESG intelligence with digital-first experiences. Emerging markets aren’t catching up – they’re shaping the next wave of investing.
Why Digital Wealth Matters in South Africa
Digital platforms have transformed access to financial tools. What once required paperwork and high fees is now available at the tap of a screen. Neobrokers, robo-advisers, digital banks and even telcos are entering the space, all to make it easier, cheaper, and more personalised to grow your money.
For South Africa, this isn’t just convenient – it’s critical. Financial literacy gaps are wide, informal employment is high, and access to traditional financial tools remains unequal. The national savings rate has hovered between 0.13% and 0.5% – far below Brazil (16.9%) and India (10.8%). Digital platforms are not a ‘nice-to-have’. They are essential infrastructure for inclusion.
South Africa’s Digital Curve
The growth of digital investing here is measurable and strong. Statista projects South Africa’s digital investment market will reach US$8.49 billion in 2025. Neobrokers are expected to drive most of this, signalling demand for low-cost, intuitive platforms.
This evolution didn’t happen overnight. It began with foundational shifts, such as the introduction of the first exchange traded fund (ETF) by pioneer Satrix in 2000, which paved the way to democratise access to the broader market. The curve steepened significantly with the arrival of zero-minimum, fractional-share platforms in 2014, which completely dismantled the high barriers to entry that kept many first-time investors on the sidelines.
Today, as the market enters maturity, traditional financial institutions are no longer watching from the sidelines. Many are partnering with or launching digital platforms to reach a new generation of investors.
Education Is Key
Access is only half the equation – understanding how to use these tools is the other. Only 51% of South Africans are considered financially literate, creating a gap between access and effective participation. That’s why Satrix supports initiatives like Money School, a free virtual learning platform for young people, and Digify Africa, which delivers financial lessons via WhatsApp in local languages.
We are also collaborating with partners like Digify to host roundtable discussions on how digital tools can bridge the literacy gap and empower first-time investors.
Policy is catching up too. The FSCA’s Draft Conduct Standard for Financial Education is a bold step towards scalable, inclusive learning.
What’s Next?
The digital wealth movement can’t be driven by platforms alone. Regulators must enable innovation. Employers need to support financial well-being. Advisers should expand their reach. Communities must share knowledge. And investors need to lead by example.
At Satrix, our goal is simple: to help every South African own a piece of the market. So, let’s measure. Let’s educate. And most importantly – let’s invest and let’s own the market.
This article was first published here on the Satrix website.
Disclaimer
Satrix Investments (Pty) Ltd is an approved FSP in terms of the Financial Advisory and Intermediary Services Act (FAIS). The information does not constitute advice as contemplated in FAIS. Use or rely on this information at your own risk. Consult your Financial Adviser before making an investment decision.
Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities and an authorised financial services provider in terms of the FAIS.
While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSPs, their shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.
An unplanned temporary management change at ASP Isotopes – and a purchase order from a US company (JSE: ISO)
The company kept SENS busy on Tuesday
ASP Isotopes announced that CEO and co-founder Paul Mann will be taking a temporary leave of absence from his duties. This is because of an orthopaedic surgery in the US that has led to some post-operative complications and an inability to travel for the next few months. This makes it impossible for him to adequately fulfil the CEO role at the moment. He will therefore step into the Executive Chairman role on a temporary basis, with Robbie Ainscrow (current COO and co-founder) moving into the Interim CEO role.
In further leadership news, Michael Cunniffe has been appointed as the CFO of Quantum Leap Energy in preparation of that company being separately listed. He is highly qualified and experienced in both finance and cell and gene therapy, so that tracks with the overall story at ASP Isotopes regarding the sheer bench strength of professional staff. I think you’ll find more PhDs at ASP Isotopes than at the average university!
In commercial news, ASP announced a purchase order for enriched Barium-137 from a US company, with a delivery date of Q1 2026. This is one of the key ingredients in building large-scale quantum computers. There’s a lot of talk around quantum computing at the moment, so that bodes well for future demand of this material.
Assura’s trading update matters for Primary Health Properties shareholders (JSE: AHR | JSE: PHP)
Assura’s listing will be suspended from 3 October
As a last hurrah before the listing is suspended and then terminated in the wake of the highly successful offer by Primary Health Properties, Assura has released a trading update for the six months to September 2025. This is of course very useful for Primary Health Properties shareholders who now indirectly own this asset.
Assura achieved like-for-like rental increases of 5.6% and undertook considerable expansion activity in the portfolio to drive future growth. The development pipeline is core to the story over the next couple of years, alongside the opportunity to enhance lease income through renewals and other activity.
Active portfolio management has led to a valuation uplift of the underlying properties, so the balance sheet is also heading in the right direction. As market farewells go, this is about as positive as they get.
The exit velocity is encouraging, although impacted by acquisition timing
Lesaka Technologies follows a style of disclosure that will be very familiar to anyone who is used to reading updates by global tech companies. If you only read local announcements though, you’ll be surprised at how strong the focus is on adjusted EBITDA rather than local favourite HEPS.
You also might be wondering what I meant by “exit velocity” above. This just means that the fourth quarter of the year saw a stronger growth rate than the full year, which means they have positive momentum going into a new financial year. I don’t usually use these terms, but I would rather expose you to the kind of stuff you might see in global tech earnings calls.
Speaking of the growth rate, full year net revenue growth was 38% and adjusted EBITDA was up 33%. There’s some margin pressure there, but they achieved their guidance for adjusted EBITDA. The Merchant Division is where you’ll find the margin dilution, with net revenue up 46% and adjusted EBITDA up 20%. The Consumer division was good for 35% growth in net revenue and an 83% jump in adjusted EBITDA!
As you’ll find in any growth company that is making acquisitions, there are distortions in the numbers that are important to understand. For example, Lesaka finalised the acquisition of Adumo in October 2024. This means that Adumo was in the current period for nine months and not in the prior period at all, which impacts comparability. Despite these limitations, it’s still worth noting that the fourth quarter achieved net revenue growth of 47% and adjusted EBITDA growth of 61%.
There’s also plenty of noise between adjusted EBITDA and the net loss, mainly due to non-cash charges related to the sale of non-core asset MobiKwik. There are also very large impairment losses and once-off transaction costs.
This mixed bag is probably why the share price is down 6% over the past 12 months. It’s certainly not for lack of growth in the core business, with substantial progress made in acquisitions and in growing adjusted EBITDA. Guidance for FY26 suggests adjusted EBITDA growth of over 45% at the mid-point. Importantly, this excludes the Bank Zero acquisition that is requires various regulatory approvals.
Netcare had a much better year in FY25 (JSE: NTC)
It doesn’t take much revenue growth for hospitals to get on the right side of operating leverage
Netcare has released a voluntary update on the trading performance for the year ended September 2025. Revenue was up by between 4.5% and 4.7% and whilst that may not sound overly exciting, it’s enough to send EBITDA higher by between 6.5% and 8.5%. For investors looking for inflation-beating returns from a defensive industry, that’s ticking the box.
Adjusted HEPS is expected to be up by between 16% and 19%. That’s firmly in growth stock territory, but I would suggest waiting for the details of the adjustments before getting too excited. Investors will hope that this move is thanks to high quality reasons like the positive impact of share buybacks.
As we’ve seen in recent years, demand for mental health care remains strong, while other areas like medical and dental visits are under pressure. It’s also important to remember that although Netcare is in a defensive sector, there are still lumpy contracts that can lead to significant percentage moves in the numbers. In Primary Care, revenue fell by between 7% and 8% due to a major contract.
Detailed results are expected to be released on 24 November.
Orion Minerals needs capital – and this time, they aren’t asking retail investors (JSE: ORN)
The chairman and a group of professional investors will plug the gap
Orion Minerals has historically been very good with giving retail investors a fair chance to participate in capital raises. It does take longer to do this of course, with the added challenge of lack of certainty around exactly how much will be raised.
Under normal circumstances, this type of raise is still manageable. But right now, Orion cannot afford to get anything wrong as it looks to cement the Glencore (JSE: GLN) funding and offtake deal. This is probably why they’ve gone the route of raising around R57 million from “sophisticated investors” i.e. from selected parties rather than broadly.
One such party is the chairman, Denis Waddell. The issue of shares to his associated entity will require shareholder approval. As for the rest of the investors, it falls with the authority that the company already has to issue shares to unrelated parties without further approval.
Here’s the bad news for recent punters though: the raise is priced at around R0.17 per share, which is well below the recent level of around R0.23 per share. To be fair, the share price is up more than 50% in the past month thanks to the Glencore deal, so only those who bought the very top of that move will complain.
No helium production at Renergen this quarter, but at least they sorted out Springbok Solar (JSE: REN)
Remember, the ASP Isotopes (JSE: ISO) deal isn’t a guarantee until all conditions have been met
Renergen has released an update for the past quarter. This may seem pointless to you based on the merger activity with ASP Isotopes, but it’s very important to remember that a deal is always capable of falling over until the very last condition is met. As things currently stand, Renergen is an independent company. The deadline for the fulfilment of the remaining offer conditions has been extended to 28 November 2025.
At least the Springbok Solar issue is out of the way. As previously announced, Renergen entered into a coexistence agreement with Springbok Solar and earned a public apology from them for their behaviour. There is a financial settlement payable to Renergen’s subsidiary, but the announcement doesn’t indicate the value.
If we look at Renergen’s underlying operations, we find the same narrative that has plagued the story in recent years. LNG production fell from 1,311 tons in the previous quarter to 987 tons in this quarter, which Renergen attributes to maintenance that was brought forward. On the helium side, there was absolutely no helium production in this quarter as the additional wells need to be tied in to make it viable.
Roll on the ASP Isotopes era…
The trees are looking greener at York Timber (JSE: YRK)
But what does it take for them to make a profit excluding fair value moves?
York Timber operates in a tough industry. The share price reflects this, with a choppy profile and a negative move of -11% over the past 12 months. It’s difficult for the share price to establish any kind of consistent trajectory when the numbers tend to be all over the place.
One of the biggest contributors to the earnings volatility is of course the fair value changes in the biological assets themselves. York Timber is required to estimate the future value of the trees and then adjust for those forecast movements in its financials. This is why they also report core earnings per share, which strips out the fair value moves.
I thought I would include the slide dealing with the biological asset valuation so that you can see the key inputs:
For the year ended June 2025, revenue increased by 14% and HEPS jumped quite spectacularly from 13.74 cents to 66.69 cents. But if you look at core EPS (excluding the fair value moves), you’ll find that the loss of 10.74 cents improved to a loss of 0.28 cents. Yes, that’s still a loss.
There are some other highlights beyond the biological asset value increase of 19%. For example, cash generated from operations (perhaps the most important measure of all) increased from R29 million to R148 million. I must note that 2024 was a particularly rough year for cash generation, so there’s definitely a low base effect here.
Lumber sales volume growth was 12%, driven in part by turnaround efforts at the underlying operations. There are still areas of the business that need urgent attention, like the Sabie sawmill that suffered an EBITDA loss of R49 million. I’m sure they will take a lot of heart from the improvements at the Jessivale sawmill, where EBITDA swung from a loss of R3.5 million to a profit of R29.1 million.
One thing about York is that the opportunity for strong positive swings in profitability is there. The challenge is that the opportunity for negative swings is also there!
As we saw last year, there’s no dividend for York shareholders.
Nibbles:
Director dealings:
An associate of a director of a major subsidiary of eMedia Holdings (JSE: EMH | JSE: EMN) bought shares worth R3 million.
The financial director of HCI (JSE: HCI) bought shares worth R1.2 million.
A director of a major subsidiary of Woolworths (JSE: WHL) sold shares worth just over R1 million.
A director of a major subsidiary of Sea Harvest (JSE: SHG) sold shares worth R825k.
A director of NEPI Rockcastle (JSE: NRP) bought shares worth R510k.
Barloworld (JSE: BAW) announced that competition approval has now been received in Angola for the offer by the consortium to shareholders. The only outstanding regulatory approval is now COMESA. The standby offer will remain open until the earliest of 11 December 2025, or 10 business days after the offer becomes unconditional.
Tiger Brands (JSE: TBS) announced that the conditions precedent for the disposal of Langeberg and Ashton Foods have been met. This is absolutely critical for Ashton and the surrounding areas, with over 3,000 permanent and seasonal staff. Tiger Brands may have one of the worst overall social records in South Africa (the horrors of listeriosis won’t be forgotten for a long time), but they put in a lot of effort to do the right thing in this case.
There are some changes to the board at Collins Property Group (JSE: CPP), the most notable of which is KR Collins moving from the CEO role into the chairman role, which of course means that Dr. Christo Wiese will be vacating the chairman role and will remain as a non-executive director. KA Searle, currently the executive managing director, will become the CEO.
Wesizwe Platinum (JSE: WEZ) finally released results for the year ended December 2024, with the delay caused by a cyberattack at the end of 2024. The group does not have enough cash to develop its key BPM project, which makes them reliant on the ongoing funding support of the majority shareholder. That’s not new news. But what is new is a legal provision of R215 million related to the conclusion of an adjudication process involving a claim by a former mining contractor, China Coal No 5 Construction Company. This is one of the reasons why the headline loss per share increased from 1.55 cents to 11.31 cents.
Shuka Minerals (JSE: SKA) released results for the six months to June 2025. The company is pre-revenue and recorded a headline loss of around R8.7 million. If you’ve been following the company, you’ll know that they are currently waiting for major shareholder Gathoni Muchai Investments to pay the next tranche of funding, with no particularly good explanation why the payment is delayed. They now expect to conclude the transfer by mid-October. This is hopefully just a “the day is darkest before the dawn” issue, with the company looking ahead to the acquisition of the Kabwe Project from Leopard Exploration and Mining.
Salungano Group (JSE: SLG) is suspended from trading as they are horribly behind on their financial reporting. They expect to release earnings for the year ended March 2024 (!) by 7 October 2025, with an expected increase in the headline loss per share of between 88% and 94%.
Speaking of suspensions, SAIL Mining (JSE: SGP) has been suspended since July 2022. They need to publish results for FY22, FY23 and FY24, along with all the interim reports as well. The reason why they are so behind is that there were three subsidiaries in the group in business rescue. They’ve managed to get through this and they are now working to catch up on the financials.
Conduit Capital (JSE: CND) is also suspended from trading, with the liquidation of CICL underway along with other litigation. Of critical importance is the enforcement of the arbitration award against Trustco. CLL, the insurance business that they tried to sell and were blocked from doing so by the regulator, is currently in run-off mode with no new growth.
We also find PSV Holdings (JSE: PSV) in the naughty corner, suspended from trading and trying to find a way to recapitalise the company. DNG Energy is expected to make a further proposal to the liquidator this month.
Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE.Disclaimer.
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The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
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This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
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This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
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The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
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