Ghost Bites (Barloworld | Gold Fields | Nutritional Holdings | Orion Minerals | RMB Holdings | Vodacom)

Barloworld shareholder? Don’t panic!

The huge drop in the share price isn’t anything sinister

I must say, I had lost track of the date of the Zeda spin-off. While reading about the exchange control approval that has been obtained for Barloworld’s special dividend of 550 cents, I noticed that the share price had fallen 17%.

Having questioned my sanity for a moment, I realised that Zeda made its debut on the market on Tuesday. It lives and breathes, trading under the ticker JSE:ZZD.

As for Barloworld, the reason for the drop is that the group is essentially significantly smaller now, as Zeda has been unbundled to its shareholders. If you add up the value of your shiny new shares in Zeda and the shares that you still have in Barloworld, it will make a lot more sense.

Change of guard at Gold Fields

Chris Griffith steps down after the Yamana transaction failed

We will never know what the boardroom conversations sounded like, but we do know that Chris Griffith has stepped down as CEO of Gold Fields. The announcement doesn’t even attempt the niceties of “seeking new opportunities” or “broadening his horizons” – instead, it thanks him for his leadership and then reminds everyone that the Yamana deal failed.

The next man in this (particularly) hot seat is Martin Preece, EVP of Gold Fields South Africa, who has been appointed as interim CEO. Preece has been with the company for six years.

It looks like Griffith and Preece have a busy December ahead, as the official handover date is 31 December.

Ouch.

Less comedy (and tragedy) ahead on the JSE

Finally, the listing of Nutritional Holdings is being terminated

In a move that is very long overdue, the JSE is terminating the listing of Nutritional Holdings with effect from 19 December. This mess of a group has delivered comedy and tragedy in almost equal measure, stumbling from one crisis to the next.

This doesn’t give the current shareholders a solution. In fact, it makes the situation even worse, as JSE regulations will no longer apply. Nutritional Holdings will be a public unlisted company, which means it is still regulated by the Companies Act but not by any stock exchange.

The lucky shareholders now hold unlisted shares in a company that can barely string together enough financial information to complete the audits for recent financial years.

With liquidation hearings scheduled for January and February 2023, there might be a short and painful ending to this story anyway.

Orion Minerals secures $87 million funding package

Definitive agreements signed with subsidiaries of Triple Flag Precious Metals Corp

In a major step for Orion, $80 million worth of funding has been raised against the delivery of 87% of future gold and silver by-product production, with the stream rate reducing to 50% after certain milestones. This shows you how specialised junior mining funding is. At the time of delivery, Orion will receive payments of 10% of the delivered value at spot prices.

There’s another $7 million to be advanced against 0.8% of gross revenue from future mineral sales.

This comes after the news of a R250 million convertible loan with the IDC, which is currently at the stage of definitive agreements being drafted and negotiated.

The two sources of funding will be used to complete a feasibility study for early mining at Prieska and enable commencement of mine dewatering.

RMB Holdings updates the market on its value unlock

With interim results now available, value investors got their calculators out

The devil is most certainly in the detail, but orderly wind-downs can offer delicious returns. Anyone who bought shares in Etion at the right time will confirm this. With a drop in the share price of over 10% in response to results, it’s not clear that the market is seeing a juicy outcome for RMB Holdings.

Are they missing a trick?

To help you decide, there are brand new results available. They highlight that since September 2020, a shareholder return of 46.5% has been delivered. That’s way above the market return available over a two-year period but also isn’t lifechanging stuff.

To demonstrate the power of closing the discount to net asset value (NAV), the NAV per share is down 10% over the past year and the share price is up 33%. I must highlight that the NAV includes a huge special dividend of 147.1 cents paid after the end of the reporting period.

If we adjust for that, the “current” NAV is 96.9 cents and the share price is 52 cents.

Herman Bosman has moved on as CEO and financial director, with Brian Roberts (the current CEO of RMH Property) stepping up to the top job. This tells you where the bulk of the remaining value lies: the property portfolio.

Not a pyramid scheme

Vodacom has closed the deal for a 55% interest in Vodafone Egypt

If my own experience with my local Vodacom tower is anything to go by, load shedding is causing a lot of pain to the network. I’m sure Vodacom’s board is only too happy to be taking a 55% stake in Vodafone Egypt, where they hopefully have a lot more electricity than we do.

With the seller of the stake in Egypt being wholly-owned subsidiaries of Vodafone Group Plc, that company’s stake in Vodacom has increased from 60.5% to 65.1%. There was also a cash portion to the deal worth R10.8 billion.

A trading update from Vodacom is expected at the end of January, which will include an update on the medium-term growth outlook.

Little Bites:

• Director dealings:
  • The Mouton family (across several trusts etc.) have loaded up on Curro shares worth nearly R7 million
  • You know it’s getting bad when several Nampak directors have headed for the exit with parts of their shareholdings. From the CEO’s sale of R985k down to much smaller sales by prescribed officers, it really isn’t looking good for this company.
  • The CEO of FirstRand has put a collar structure in place over R50.3 million worth of shares, with a put strike price of R55.82, a call strike price of R75.06 and an expiry date in December 2023. The current traded price of FirstRand shares is just over R61.
  • A prescribed officer of Impala Platinum has disposed of shares worth R1.05 million
  • A director of Raubex has bought shares worth R247k
  • The CEO of Calgro M3 has bought shares worth R353k
  • Via their shared investment vehicle, key directors of Ninety One have acquired shares worth £31.3k

• Merafe has announced the European benchmark ferrochrome price for the first quarter of 2023. At 149 US cents per pound, this price is a rollover from the fourth quarter of 2022.

• Delta Property Fund has announced an agreement to sell the Beaconsfield property in Kimberly for R22.1 million. This will reduce the loan-to-value by just 10 basis to 58.1%, so there isn’t much to get excited about here.

• The shareholders of RCL Foods voted almost unanimously in favour of the resolutions required to unwind the B-BBEE Structure.

• Glen Anil Development Corporation has agreed a deal with an associate of a director of Purple Group. The deal is complicated enough that I didn’t just box it under the other director dealings, as the director of Purple only holds an 18.1% stake in Serialong Financial Investments, the company selling the shares. The initial deal is worth R24.3 million and increases Glen Anil’s stake in Purple to 1.2%. The price of 202.08 cents per share is significantly higher than the closing price of 170 cents. The parties have also entered into option agreements that give Glen Anil the ability to buy another 31 million shares over the next few years at strike prices ranging from 175 cents to 310 cents.

• Allan Gray is trying hard to get out of the way of Nampak, but it still owns a whopping 16.44% in the company. The share price has nearly halved in the past month on news of the pending rights offer.

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