Company news in brief

Publication of SAA rescue plan extended

The business rescue practitioners of SAA have been granted a one-month extension to publish their plan to save the embattled flag carrier from liquidation.

The airline was placed under business rescue in December and earlier in the month announced the cancellation of all its domestic routes apart from the popular Cape Town - Johannesburg flight in an effort to save costs.

The plan detailing the turnaround was set to be published before the end of February.

But on Friday, just one day before the deadline, business rescue practitioners Siviwe Dongwana and Les Matuson, announced they had been granted an extension to the end of March following a vote by a majority of creditors .

“We are still in the process of finalising the steps to implement the proposed restructuring option as well as the anticipated effect the plan will have on stakeholders, including the estimated return to creditors,” the BRPs said. – Fin24

Tongaat Hullett finds buyer for starch business

Tongaat Hullett will sell its starch business to a subsidiary of logistics company Barloworld for R5.35 billion, which will help reduce its debt.

The sugar producer on Friday afternoon issued a notice to shareholders indicating that the starch business would be sold to KLL Group, a wholly-owned subsidiary of Barloworld. This announcement comes after it announced it was looking for a buyer earlier this month.

According to the group's interim results for the six months ended September 2019, the division's operating profit was R306 million.

Its starch business, established in 1919, is one of the largest wet millers in sub-Saharan Africa and operates four plants across the country. It manufactures modified and unmodified starch as well as a powdered glucose and agri-products.

In terms of the agreement, all jobs in the starch business will be retained with the transfer of employees' conditions of service to remain intact, the group said in a separate statement on the transaction. – Fin24

Comair hit by SAA claim uncertainty

For the six months ending December 31, 2019 Comair reported a headline loss of R564 million, of which R450 million is attributable to the increase in a loss allowance on a South African Airways (SAA) damages claim.

Comair operates its own low-cost carrier kulula.com as well as British Airways in South Africa under a licence agreement.

Earnings per share (EPS) declined by 543% to a loss per share (LPS) of R1.205 per share and headline earnings per share (HEPS) decreased by 546% to a headline loss per share (HLPS) of R1.212 per share. Revenue increased by 3% to R3.8 billion.

Comair group CEO Wrenelle Stander told Fin24 it is facing strong headwinds as a result of its fleet renewal programme; the transition of its fleet from South African Airways Technical (SAAT) to Lufthansa Technik Maintenance International; the impairment of the SAA claim; as well as the extended grounding of the 737 MAX 8.

At the same time, she said, regarding various board resignations in the past, that it followed on from an earlier board meeting where the board charter was reviewed, and it was decided to create greater alignment with King IV governance principles. – Fin24

Denel readies to report back

Denel says it has put in place an "audit fix plan" and will be submitting its first progress report in March after implementing several accounting reforms.

The state-owned arms manufacturer was given a disclaimer of audit opinion in its audit report for the financial years ended March 2018 and March 2019. This means the auditor general (AG) was not given sufficient audit evidence to provide a basis for assessment.

In a statement on Friday, Denel said it had addressed issues relating to people, processes and systems across the group. These include implementing new processes and installing experts in oversight roles.

Denel, which recently had its outlook upgraded to stable by ratings agency Fitch, has been rolling out a turnaround plan after suffering reputational damage linked to allegations of state capture. Its reforms included cutting ties with Gupta-linked VR Laser.

On Friday, Denel said new accounting standards had been implemented uniformly across the group and position papers had been updated and signed off relating to construction contracts, leases, foreign exchange rates as well as property and equipment. – Fin24

Hyundai reports lowest sales in decade

Hyundai Motor reported its lowest monthly global sales in a decade in February as the coronavirus outbreak hurt demand, in what is the first major indicator of damage to the broader auto sector from the epidemic.

It turned in a preliminary sales figure of 275 044 vehicles for the month, 13% below 315 820 vehicles sold a year earlier. Hyundai last reported sales lower than this in February 2010.

South Korea’s Hyundai, which with affiliate Kia Motors is the world’s No.5 car maker, is the first major automaker to announce sales for the month. Chinese and US players will turn in their numbers in the coming weeks.

The flu-like virus, which originated in China, has killed nearly 3 000 and roiled global financial markets as investors and policymakers brace for a steep knock to world growth.

South Korea has the most cases of infections outside the mainland, with the total at 4 212, affecting companies like Hyundai and Samsung Electronics. – Nampa/Reuters