Company news in brief

Investec to hive off asset management

South Africa's Investec plans to hive off and separately list its asset management unit in a restructuring that comes as the long-serving company founder leaves the financial services group.

The bank plans to float the asset management business on the London Stock Exchange with a secondary float on the Johannesburg exchange.

"It is now the right time to demerge and list our asset management business to support it in the next phase of its development," chief executive Stephen Koseff said in a statement. Koseff will leave next month almost four decades after co-founding the company.

Investec's asset management unit has 109 billion pounds (US$143 billion) in clients' assets under custody, with offices in several cities such as London, Cape Town, New York and Hong Kong. It contributes around a fifth of group profits.

Under the deal, the current head of the asset management business, Hendrik du Toit, would be the chief executive of that business, while Fani Titi would become the CEO of investment banking business, or what is left of Investec.

The Anglo-South African bank said the move will allow its asset management business to thrive as an independently-listed company, and will help it to attract top quality fund managers. – Nampa/Reuters

Aspen sells baby milk business to dairy giant Lactalis

Aspen Pharmacare has agreed to sell its infant formula business to Lactalis for R12.9 billion to focus on core activities while the French buyer looks to revive its baby milk expansion after a health scandal.

Investors in the South African drugmaker appeared unimpressed, however, after expectations that the deal could top US$1 billion. The company's share price tumbled after the deal's announcement on Thursday alongside full-year earnings.

Rising incomes in emerging markets coupled with global population growth have made infant formula an attractive proposition in a market dominated by Nestle, Danone and Reckitt Benckiser, which acquired Mead Johnson of the United States last year.

"The market expected Aspen to get US$1 billion to US$1.5 billion dollars," Cratos Capital equity trader Greg Davies said, adding that there is also some doubt over Aspen's stated growth expectations.

FNB Wealth and Investments portfolio manager Wayne McCurrie said a "second disappointment" concerned Aspen's rising debt levels and whether Africa's biggest manufacturer of generic drugs had been forced to sell the infant milk business to reduce gearing levels. – Nampa/Reuters

Gold Fields plans to extend life of Peru mine

South African miner Gold Fields Ltd aims to extend the life of its Cerro Corona gold mine in Peru through 2040 with an investment of at least $240 million, the company's vice president for the Americas said .

"We're doing studies with Peruvian consulting firms and international engineering companies to extend the life of Cerro Corona until 2040," Luis Rivera told journalists at an event. "It's going to involve the use of new technologies."

Cerro Corona produced 5.1 million grams of gold last year, according to Peru's Energy and Mines Ministry.

The gold mine in northern Peru that also produces some copper, had previously been scheduled to operate until 2023.

Rivera added that the company plans to spend $30 million next year to explore for gold, copper and other metals in the regions of Ancash and Pasco in central Peru. – Nampa/Reuters

Glencore's bid for Chevron assets approved

South Africa's Competition Tribunal conditionally approved Glencore's proposed US$973 million acquisition of Chevron Corp’s subsidiary in the country, all but scuppering a rival bid from China's Sinopec.

Chevron agreed last year to sell its 75% stake to state-owned Sinopec, before miner and commodities trader Glencore swooped in after reaching a deal with minority shareholders, who backed it and exercised preemptive rights on the sale.

The assets include a 110 000 barrel-per-day oil refinery in Cape Town, a lubricants plant in Durban as well as 845 service stations and other oil storage facilities. It also includes 220 convenience stores across South Africa and Botswana.

Glencore is providing funding to, and making its bid through, its Black Economic Empowerment partner Off The Shelf Investments (OTS), a minority shareholders' group, which already owns virtually all the remaining shares in Chevron SA.

South Africa's competition watchdog approved the bid in August, but the Competition Tribunal makes the final ruling on deals. – Nampa/Reuters

Implats CEO confident of funding during restructuring

South Africa's Impala Platinum (Implats) is confident of having adequate cash while restructuring its operations and cutting its workforce despite reporting a wider full-year loss.

Implats plans to cut about a third of its staff - more than 13 000 jobs - over two years at its labour-intensive, conventional operations in the Rustenburg platinum belt.

The number of shafts will be reduced to six from 11 with production cut to 520 000 ounces per annum from 750 000 ounces.

"We understand the market fears but we are fairly confident we are well positioned," said chief executive Nico Muller, referring to concerns over the company's liquidity.

Implats said in a statement a radical and urgent transition to a leaner and more profitable operation was the key to its future success. – Nampa/Reuters