Company news in brief

Naspers plans to spin off, list pay-TV unit

South Africa's Naspers unveiled plans on Monday to spin off and list separately its pay-TV unit, its first major move aimed at narrowing a discount between its market value and the value of its stake in Chinese technology giant Tencent.

Founded more than 100 years ago in Stellenbosch, South Africa, Naspers has transformed itself from a newspaper publisher into a US$94 billion behemoth but it owes all of that valuation to its one-third stake in Tencent.

The Tencent stake is worth around US$155 billion, or 65% more than Naspers despite the company owning other assets such as the pay-TV unit MultiChoice, which is a de facto monopoly in Africa. The discount has prompted some investors to urge Chief Executive Bob van Dyk to find ways to narrow it.

MultiChoice is expected to list in Johannesburg in the first half of 2019, Naspers said, adding that the business would be hived off with limited debt to enable it to pursue growth opportunities in Africa.

The Multichoice business will be spun off to existing shareholders and Naspers will not raise new cash through the move. MultiChoice, which also owns a streaming service called Showmax, contributes around 18% of Naspers' total sales of US$20.1 billion. It has a presence in around 13.5 million households in Africa and generates around R6 billion in annual trading profit. – Nampa/Reuters

Watchdog imposes conditions on Sibanye-Lonmin deal

South Africa's competition watchdog on Monday approved the takeover of platinum producer Lonmin by Sibanye-Stillwater but imposed conditions to limit job losses.

The Competition Commission said the transaction, which is scheduled to close by the end of the year, did not prevent or lessen competition in platinum markets but did raise "significant public interest concerns".

The commission said Sibanye had to start three short-term mining projects to avoid the loss of over 3 000 jobs, keep Lonmin's existing contracts with black-owned suppliers and maintain Lonmin's black-ownership deal with the Bapo ba Mogale community.

Lonmin, which is strapped for cash, unveiled plans to cut 12 600 jobs and a further 890 merger-related layoffs when its transaction with Sibanye was announced in December.

Both companies say the job cuts are inevitable and are necessary to save the rest of the 33 000-strong Lonmin workforce. Sibanye's chief executive told Reuters in May that shareholders might not find the Lonmin deal attractive if the Commission imposed tough conditions. – Nampa/Reuters

Petra Diamonds' core profit climbs

Petra Diamonds on Monday reported a jump in full-year adjusted core earnings due to a rise in production at its continuing mines and said its chief executive would step down.

Petra was hobbled by a stronger South African rand and operational delays in the first half of the year as well as a confiscation of diamonds in Tanzania that left it strapped for cash and in crippling debt.

But improved performance in its diamond mines in the second half, a cash raise in June and a reversal in rand strength have helped the company cut debt and raise core earnings.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to US$195.4 million from US$142 million in the previous year.

Production rose 19% to 3.8 million carats when excluding the KEM Joint Venture because it was sold.

The company slipped into a net loss due to an impairment and a higher depreciation charge as well as higher financing costs.

Petra did not name a successor for its chief executive role and expects to announce two non-executive appointments next month. Outgoing CEO Johan Dippenaar has been at the helm since Petra merged with Crown Diamonds in 2005. – Nampa/Reuters

Uganda’s Cipla raises US$43.8 mln in IPO

The Ugandan unit of India's pharmaceutical giant Cipla raised 167 billion Ugandan shillings (US$43.8 million) from its oversubscribed initial public offering (IPO), an investment bank that helped advise on the transaction said on Monday.

Cipla Quality Chemical Industries Ltd (CQCIL), majority owned by India's third-largest drugmaker, sold 657 million shares equivalent to 18% of the firm's total equity. Each share in the IPO was priced at 256.5 shillings.

John Porter, chief business officer at investment bank Renaissance Capital, told Reuters interest came from local and international investors.

Cipla Quality Chemical Industries Ltd, established in 2005, has a factory in Uganda's capital Kampala and makes a range of drugs including antiretrovirals, anti-malaria and drugs to treat Hepatitis B and C. Most of the drugs are sold in Sub-Saharan Africa.

The IPO is the first on Ugandan bourse, a small exchange of about 17 equities, since 2012 when the country's sole power distributor Umeme Ltd went public. – Nampa/Reuters

Coke eyes cannabis-infused drink market

Coca-Cola Co is closely watching the fast-growing marijuana drinks market for a possible entry that would expand the world's largest soft drink maker's ambitions further away from sugary sodas.

Coca-Cola announced its interest in a statement on Monday, responding to a report from BNN Bloomberg that said it was in talks with Canada's Aurora Cannabis Inc to develop drinks infused with cannabidiol (CBD), the non-psychoactive chemical found in marijuana.

Coke would join a rush by major alcohol makers and a cigarette company to test the cannabis market and find partners ahead of the Oct. 17 launch of legal recreational marijuana in Canada.

Beer makers Constellation Brands, Molson Coors and Heineken are all playing in the market for cannabis products. For example, Heineken's craft beer Lagunitas recently launched Hi-Fi Hops, a beer-flavored sparkling water with THC and CBD.

Canada is the first major economy to legalise recreational marijuana, and shares in cannabis producers have rallied in anticipation. New Cannabis Ventures' global cannabis stock index has risen about 87 percent over the past year. – Nampa/Reuters