Lonmin buys time but platinum is bigger problem

November 9, 2015

A $407 mln rights issue at an eye-popping 94 pct discount will allow the South African miner to postpone a day of reckoning with its creditors. Lonmin has bought itself a reprieve, but this won’t fix the platinum price, or help it avoid another strike at its Marikana mines.

AB InBev must change spots to make SAB deal work

October 13, 2015

Having won its UK rival’s agreement to merge, the Budweiser brewer now gets to put its fearsome talent for cost-cutting to work. But that may not be enough. AB InBev will need to create growth and court governments to make the $104 bln bid stack up. Those are different skills.

Bud can swallow SABMiller without busting a gut

September 17, 2015

AB InBev’s offer for the Peroni brewer could come in at $110 billion. Up to half might be paid in equity, while disposals may cut the cash outlay by around $20 billion. Even before synergies, that could leave the new group’s net debt to EBITDA ratio the right side of four times.

Woolworths pays too-steep ransom in Aussie battle

June 24, 2014

The South African group is buying billionaire Solomon Lew’s stake in an Australian unit in return for his support in its $2 bln takeover of retailer David Jones. The $201 mln side deal lifts the effective takeover premium – raising the pressure on Woolworths to realise synergies.

South Africa needs neighbors’ growth rates

May 2, 2014

Two decades after Nelson Mandela became president, the post-apartheid generation will vote for the first time in the May 7 election. The ANC represents his political legacy, but that’s undermined by the party’s weak economic results. Maybe the “Born Frees” can help change that.

South Africa platinum crisis not over yet

September 19, 2012

A deal between Lonmin and its striking miners might solve an immediate problem, if it holds. But it sets up other big challenges for the company and the industry. A big wage hike will hurt already weak margins. And the response may only encourage further strikes.

No easy fix for South Africa platinum crisis

October 4, 2012

Striking miners want higher pay for dangerous work. But current prices are too low for the industry to pay up. Cutting production would help, but platinum mines are deep and expensive to shut. Firing workers is political dynamite. So the crisis drags on.

Lonmin doesn’t have to surrender to Xstrata – yet

November 9, 2012

The big platinum miner spurned 25 pct owner Xstrata’s demand for management change in return for backing its $817 mln rights issue. It can afford to, for now: the fundraising is underwritten and Xstrata is probably loath to be diluted. But after this battle, Lonmin faces a war.

South Africa has work cut out to reach BRIC goal

August 26, 2010

South African president Jacob Zuma wants to join the BRICs. The likely deluge of foreign investment from membership of the club representing the biggest fast-growing economies would bring huge benefits. But Zuma has plenty to prove -- including that he can avoid the BRICs' worst failings.

Mandelanomics was too conventional to shine

December 5, 2013

Nelson Mandela, dead at 95, was a brave leader who was too timid economically. Avoiding the errors of others, he set post-apartheid South Africa on course toward being a mostly free market with stable finances. Unfortunately, he also left the country slow-growing and unequal.