Africa Equity

Standard Chartered and Lonmin will each begin a new chapter in their stories on Friday, as results are published of their rights issues, books for which closed on Thursday.

Anglo American’s announcement this week that it will increase its asset sales target to $4bn, as part of a plan to adjust to painfully lower minerals prices, is the latest sign of two trends that are expected to drive M&A activity and equity capital markets business in 2016: carve-outs and divestments of assets; and the shake-up in natural resources.

Citigroup and Morgan Stanley have on Thursday night launched and closed the expected $2.5bn capital raising for Naspers, the South African media and e-commerce company, as an accelerated bookbuild. The sale is covered.

ArcelorMittal South Africa is seeking to raise R4.5bn ($321m) to improve its weakened financial position, with a rights issue fully underwritten by its parent, ArcelorMittal Group.

Lonmin's $407m rescue rights issue passed its first hurdle on Thursday (November 19), when shareholders voted strongly to approve the deal. Lonmin's shares fell 2.6%, but that was mild by recent standards.

Bank of Georgia completed the IPO of its healthcare subsidiary on Monday, as it successfully priced the deal, although at a price much below what it had hoped for.

African private equity is feeling the effects of the wider capital flight from emerging markets and the downturn in commodity prices, but market participants say there are still fruitful investments to be made.

Brait, the South African private equity firm listed in Luxembourg and Johannesburg, issued a £350m convertible bond on Friday September 11. A banker at one of the leads said the deal, a true credit instrument, was very unusual for a company of this kind.

Mediclinic, the South African healthcare group, achieved strong pick up on its R10bn ($770m) rights issue to fund its takeover of Cinven’s remaining stake in London-listed Spire Healthcare.

Oceana Group, a South African fishing company incorporated nearly a century ago and listed in Johannesburg, intends to raise R1.2bn ($94m) through a rights issue.

In a week barren of equity block trades in London, the only action came from South Africa, where Investec Bank conducted an accelerated bookbuild from its Johannesburg desk on Wednesday night (June 17), to finance an acquisition for Investec Property Fund.

Curro, the Johannesburg-listed operator of private schools, has completed a R740m ($62m) rights issue.