Ghost Bites (AB InBev | Mondi | MTN)

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AB InBev exits Russia with an empty glass (JSE: ANH)

There might be a payment down the line – but it won’t be material

Back in April 2022 and in the aftermath of the invasion of Ukraine, AB InBev announced that it was “forfeiting all financial benefit as a non-controlling partner” from the joint venture operations in Russia, called AB InBev Efes. The partner there is Turkish brewer Anadolu Efes and the parties were in discussions at that point in time for the partner to buy out AB InBev’s stake. The impairment at the time for this was $1.1 billion.

Considering there was really only one buyer in town for this share in the joint venture, it’s taken a long time to announce a deal. Perhaps AB InBev was playing for time in the hope that things would improve. Either way, there’s now a transaction on the table and the cash being received by AB InBev up-front is precisely zero. Dololo. Zilch. Nada.

There’s a chance of payments in years to come, subject to regulatory approvals, but AB InBev warns that these would be immaterial anyway.

Mondi is ready with the special distribution (JSE: MNP)

The proceeds from the Russian disposal are earmarked for this

If you’ve been following Mondi, you’ll know that the company disposed of the converting operations in Russia in June 2023 and Syktyvkar in October 2023. There’s obviously some leakage along the way (like transaction costs), but €775 million is available for a special dividend to shareholders.

This works out to €1.60 per ordinary share. Interestingly, to avoid breaking share price charts going forward, there’s a share consolidation where shareholders will receive 10 shares for every 11 shares in issue. This will have the effect of making the share price comparable before and after the special dividend.

This transaction requires a circular and a shareholder vote in mid-January. If all goes to plan, the dividend will be a lovely Valentine’s Day gift (well almost – scheduled for 13 February). I can’t wait for my “from Russia, with love” headline.

And by the way, Mondi has already indicated the exchange rate applicable to the dividend. It works out to R32.4264320 per share. We can all aspire to own so many shares that the seventh decimal place makes a difference.

The SIM registration deadline is here for MTN Nigeria (JSE: MTN)

Hopefully, they will manage to save most of the numbers

This has been a long time coming. The regulator in Nigeria is trying to clamp down on unregistered SIM cards in the country. Since April 2022, we’ve already had a scenario where outgoing calls are barred for subscribers whose numbers are not associated with national identity numbers.

Now, depending on the verification status, lines will be barred by either 28 February or 29 March 2024. I’m not 100% sure what this means for data services. If data was still working up until now and only outgoing calls were barred, then I’m not surprised that it failed to have the desired effect on forcing compliance. Users can just use WhatsApp!

For MTN Nigeria, the relevance here is that they want to retain their customers, so there will be a big drive now to get holders of unregistered SIM cards to sort it out before the deadline. It’s important to note that this is an industry-wide issue, not something specifically targeted at MTN’s business.

Little Bites:

• Director dealings:
  • The Chair of Mondi (JSE: MNP) has bought shares worth £38k.
  • Niki Giles, the returning CFO of Sygnia (JSE: SYG), has bought shares in the company worth R160k.
  • The COO of Kibo Energy (JSE: KBO) sold shares in the company worth £4k. I cannot stress enough how speculative that company is, so don’t ignore something like this.
  • An associate of directors of Argent Industrial (JSE: ART) sold shares worth R77k. Right at the bottom of the announcement, there’s a note that the shares are linked to a retired director and shareholder of the same associate.
  • Three directors of Adcock Ingram (JSE: AIP) exercised options to acquire shares worth R2.8 million. There’s no indication of any sales yet to cover taxes, but let’s keep an eye out.

• The process for AYO Technology (JSE: AYO) to finalise its settlement agreement with the GEPF and the JSE is dragging on and on. There’s yet another extension now, with the long-stop date moved out by six months to 30 June 2024. Putting the long in long-stop, that’s for sure.

• Sasfin (JSE: SFN) announced that Global Credit Ratings (GCR) has affirmed its international scale long and short-term issuer ratings of B/B with a Stable outlook. It’s interesting to me that the outlook has been left at Stable given the disposals of the Capital Equipment Finance and Commercial Property Finance businesses. I would’ve expected to see it improve. This is a cautious approach from the ratings agency.

• There’s absolutely no liquidity in Deutsche Konsum (JSE: DKR) so the annual results for the year ended September only get a passing mention down here. Even though rental income in this German fund was up 7%, the effect of interest rates hikes meant that Funds From Operations per share actually fell year-on-year. The loan-to-value has shot up from 49.7% to 61.6% which is problematic.

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