Photo: David Harrison.
Photo: David Harrison.

Steinhoff leads the way in FOs

By Kabelo Khumalo Time of article published Mar 8, 2019

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JOHANNESBURG – A study by professional services firm PricewaterhouseCoopers (PwC) has shown embattled Steinhoff led the way in Further Offers (FO) that took place last year as it moved to boost its liquidity position following its 2017 accounting scandal.

The PwC study found that Steinhoff raised $1.2 billion (R17.5bn) on the JSE though disposal of its stakes in KAP Industrial, STAR and PSG Group.

Steinhoff got $580million from the sale of its shares in PSG, $310m from KAP and $312m from STAR.

PwC said South African companies also continued to dominate FO activity in 2018, accounting for 63percent of FO proceeds and 49 percent of FO volume. “The nature of these FOs reflect a mixed landscape, with a significant portion of funds raised for debt refinancing and expansion strategies,” PwC said.

“Over the past five years, there have been 413 FOs by African companies, raising $44.7bn on both African and international exchanges, a 2percent increase in capital raised over the preceding five-year period, 2013-2017.”

Egyptian telecoms giant Orange was the single biggest FO in the continent last year, raising $868m, while Sanlam raised $486m.

The study further found that Absa raised the largest FO proceeds in the past five years, raising a whopping $3.8bn in two FO deals related to its separation from Barclays in 2016 and 2017. Naspers' $2.5bn FO in 2015 was the second largest within the five year period.

The PwC research also showed that the JSE had the largest share of initial public offerings (IPO) on the continent last year. When looked at a five-year period the study found that since 2014, capital raised from 43 IPOs recorded on the JSE was $5.9bn.

PwC said the financial sector continued to be a big drive in equity capital markets in the country and continent with unbundlings, acquisitions and regulatory changes driving market activity in the sector.

The managed separation of Old Mutual saw Quilter raise $322m from its dual listings on the London Stock Exchange and the local bourse.

The unbundling also saw the listing the newly created Old Mutual on the JSE.

PwC said the telecommunications sector was also expected to emerge as a key capital markets player.

The firm highlighted the mooted IPO of MTN Nigeria as a significant game-changer for the sector.

MTN overcame several regulatory headwinds in 2018, the most material of which was the Central Bank Central Bank of Nigeria dispute on historical dividend repatriations.


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