Major International Business Headlines Brief::: 29 May 2019

Wed May 29 01:40:21 CAT 2019

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Major International Business Headlines Brief::: 29 May 2019

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*  Kenya needs to begin reorganizing debt, room for borrowing has shrunk -central bank chief

*  Kenya engages World Bank for $750 mln loan for budget support

*  Airtel Africa looks at $1 billion London listing

*  Tanzania, Zambia plan $1.5 bln oil products pipeline - Tanzania minister

*  MTN to open 'market place' in step towards Africa's biggest bank goal

*  Lonmin shareholders approve takeover by Sibanye-Stillwater

*  Sibanye's $286 million Lonmin takeover gets all clear from shareholders

*  Zambia to cancel, delay more project loans as debt soars - finance minister

*  South Africa's rand falls as trade war concerns hurt sentiment

*  Uganda's tungsten mine sues International Tin Association for defamation

*  MacKenzie Bezos pledges to donate half her $37bn fortune

*  Real Madrid 'most valuable club in Europe', says KPMG

*  Johnson & Johnson faces trial over opioid crisis in Oklahoma

*  British Steel 'has 80 potential bidders'

*  Boots review puts 200 stores at risk of closure

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Kenya needs to begin reorganizing debt, room for borrowing has shrunk -central bank chief

NAIROBI (Reuters) - Kenya’s headroom for new borrowing has shrunk since it tapped the Eurobond market this month and it is time for the country to begin reorganising its debt, central bank governor Patrick Njoroge said on Tuesday.

Njoroge, whose term is due to end next month, told reporters that the $2.1 billion Eurobond issuance in mid-May allowed Kenya to refinance some of its existing loans and “hopefully (give) us more room to expand the economy” and increase export capacity.

Kenya’s public debt as a percentage of gross domestic product (GDP) has increased to 55% from 42% when President Uhuru Kenyatta took office in 2013. The East African government has defended the increased borrowing, saying the country must invest in its infrastructure, including roads and railways.

Critics of the borrowing spree have questioned the value of some of the projects, particularly the billion China-backed railway project completed in 2017.

“As advisers of the government, our point is this is the time to begin working on reorganising our debt, not in a frantic way, so doing it the Eliud Kipchoge way, which is (that) it’s a marathon (run) and you have to do it in a steady way.”

The latest Eurobond was issued in tranches of seven and 12-year paper. The seven-year portion of the latest issue was priced at 7.0%, while the longer-dated tranche was priced at 8.0%.

“It is important to say that the moment for dealing with debt reorganisation, looking at debt and itself reorganizing it,...that moment has come,” Njoroge said. He did not spell out how the debt could be restructured.

Kenya is also negotiating with the World Bank for a $750 million loan for budgetary support, documents on the lender’s website showed on Tuesday.

Njoroge declined to comment on whether his tenure will be extended for a second and final four-year term.

The Kenyan economy expanded by 6.3% in 2018 as good rains boosted the agriculture sector. But a delayed start to Kenya’s rainy season this year could shave as much as 0.4% off forecasted growth, he said.

“We are not talking drought like we had in 2017,” Njoroge said, “because the rains have arrived, and the question now is are they adequate?”

The bank has forecast the same growth rate for this year, but the first rains, which usually start in March, did not come until late April.

First-quarter growth data, usually released in June, would make the outlook for this year clearer, he said.

The central bank held its benchmark lending rate at 9.0% on Monday, saying it would keep an eye on recent food and fuel price rises that could fuel inflation.

The U.S.-China trade dispute had escalated to a “full-scale war”, Njoroge added, and posed risks to the Kenyan economy. Uncertainty over Britain’s planned exit from the European Union is another external risk, he said.

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Kenya engages World Bank for $750 mln loan for budget support

NAIROBI (Reuters) - Kenya is negotiating with the World Bank for a $750 million loan for budgetary support, documents on the proposed funding posted on the lender’s website showed on Tuesday.

The East African nation has multiple development funding programmes, worth billions of dollars, with the Washington-based lender, but the funding bypasses the Treasury and is usually channelled straight into the projects.

If the $750 million loan gets approved, it will be the first time in years the World Bank is putting cash straight into the Treasury to be used at the discretion of the government, said a source with knowledge of the issue.

The loan, which comes under the bank’s so-called development policy financing, is designed to support the government’s policy and institutional reforms and help make economic growth more inclusive.

The World Bank declined to comment as the loan has not been approved by its board.

Officials at the ministry of finance did not immediately respond to Reuters’ request for comments.

Kenya raised $2.1 billion in a sovereign bond this month, but some critics have expressed concerns over the country’s growing debt burden.

There has been a jump in government borrowing since President Uhuru Kenyatta came to power in 2013 - a rise that some politicians and economists say is saddling future generations with too much debt.

Kenya’s public debt as a percentage of gross domestic product (GDP) has increased to 55% from 42% when Kenyatta took over. The government has defended the increased borrowing, saying the country must invest in its infrastructure, including roads and railways.

Finance Minister Henry Rotich told Reuters earlier this month that he was aiming to bring down debt servicing costs in the next few years to 12-16%.

Airtel Africa looks at $1 billion London listing

LONDON (Reuters) - Airtel Africa Ltd, a subsidiary of Indian telecoms group Bharti Airtel Ltd , is considering a stock market flotation in London, it said on Tuesday, part of efforts to expand its data and mobile money services across Africa.

The company is aiming to raise around $1 billion in a June equity offering, a source close to the deal said. Airtel operates in 14 African markets including Democratic Republic of the Congo, Kenya, Nigeria, Rwanda, Seychelles, Uganda and Zambia.

Last year, the telecom operator raised $1.25 billion from six global investors including SoftBank Group Corp, Warburg Pincus LLC and Temasek Holdings (Private) Ltd.

A further $200 million was raised in January from the Qatar Investment Authority (QIA), valuing the company just under $5 billion.

Airtel Africa is looking to trade on the main market of the London Stock Exchange , using its premium listing segment, which has more stringent rules than the European Union’s minimum requirements, and sell 25 percent of new shares to reduce existing debt.

The cash injection from existing investors has already helped to reduce Airtel Africa’s net debt to $4 billion in March, compared to $7.7 billion in the previous year.

Its net income reached $83 million in the year to March, compared to a net loss of $49 million a year earlier.

The telecoms operator is also seeking to list on the Nigerian Stock Exchange.

“The 14 countries where we operate offer strong GDP growth potential and have young and fast-growing populations, low customer and data penetration and inadequate banking infrastructure,” chief executive Raghunath Mandava said in a statement.

“These fast-growing markets provide us a great opportunity to grow both our telecom and payments businesses.”

Indian owner Bharti Airtel last year ditched the IPO of African mobile phone mast firm Helios Towers, without giving any reason.

A source said at the time that the expected IPO price was too low for shareholders who had been valuing the firm at as much as $2.8 billion.

Proceeds from the European IPO market have fallen to their lowest in more than a decade in the first three months of 2019, according to Refinitiv data.

Airtel Africa’s debut on the London market would follow that of Middle Eastern payments companies Finablr and Network International, which started trading over the past couple of months.

The company has appointed JP Morgan , Citigroup Inc , BofA Merrill Lynch , Absa Group Limited, Barclays Bank PLC , HSBC , BNP Paribas , Goldman Sachs International (GS.N) and Standard Bank Group Ltd (SBKJ.J) as advisers.

Tanzania, Zambia plan $1.5 bln oil products pipeline - Tanzania minister

DAR ES SALAAM (Reuters) - Tanzania and Zambia plan to build a refined products pipeline to transport petroleum between the two countries at a cost of $1.5 billion, Tanzania’s Energy minister said on Tuesday.

Zambia, Africa’s top copper producer, imports most of its petroleum requirements, mainly from the Middle East, through the port of Dar-es-Salaam in Tanzania.

Medard Kalemani said in a presentation of his ministry’s 2019/20 (July-June) budget that the pipeline would run from the commercial capital Dar es Salaam to Zambia’s mining city of Ndola, some 1,349 km away.

Kalemani, speaking in Tanzania’s administrative capital Dodoma, did not give a time frame for when the project would kick off, but said that in the coming fiscal year, they planned to complete a feasibility study. He also gave no details on how it would be financed.

“The project will reduce challenges in transporting petroleum products in the countries that use our ports to import fuel and open up business opportunities ...” he said.

“The project will be implemented jointly by Zambia and Tanzania.”

Kalemani said the pipeline would also have take-off points at Morogoro, Iringa, Njombe, Mbeya and Songwe regions on the Tanzanian side.

Tanzania and Zambia already have a crude oil pipeline between them transporting oil to Zambia, where it is refined in Ndola for local use.

MTN to open 'market place' in step towards Africa's biggest bank goal

JOHANNESBURG (Reuters) - South Africa’s MTN on Tuesday revealed plans to build a “market place” app where customers will be able to buy everything from insurance to washing machines as it seeks to build its mobile money platform MoMo into Africa’s biggest bank.

MTN, whose 233 million telecoms subscriber base spans Africa and the Middle East, is also trying to simplify its portfolio, reduce risk and realise 15 billion rand ($1 billion) worth of capital over the next three years as it transforms its model.

As part of this process, MTN said on Tuesday it would sell its interest in investment fund Amadeus to private equity firm HarbourVest for around 1.2 billion rand.

In presentation slides for a capital markets day in Johannesburg, MTN revealed it wanted to first enable payments to merchants and companies via MoMo and then build the app into a “financial services market place” selling MTN and third party products.

MTN’s move is part of a shift by financial services firms to turn their banking apps into platforms, allowing third parties to build-in their products and access their customer bases.

Its slides showed a mock-up of an app offering insurance, banking products like loans, savings and investments and fashion, electronics and appliances.

With new digital-only banks and fintech firms enjoying growing popularity with cheap offerings and slick apps, major lenders are scrambling to adapt their traditional models.

Across Africa banks have also rushed to digitise their offerings and make them more accessible but largely to fend off mobile operators like MTN, which have successfully tapped into large sectors of the population who did not have bank accounts.

Some, like South Africa’s FirstRand, have signalled plans to turn their app into a platform where customers can access other services.

MTN, which has branched out from telecoms into music streaming and messaging, estimates the total addressable market for MoMo’s traditional products combined with incoming ones like payments and its marketplace to be worth 90 billion rand.

It was targeting 60 million active MoMo users, up from 27 million users, and wants to be the number one fintech in Africa.

This is in addition to plans to grow in voice, data and its enterprise and infrastructure segments, the presentation showed.

($1 = 14.6125 rand)

Lonmin shareholders approve takeover by Sibanye-Stillwater

LONDON (Reuters) - A majority of Lonmin’s shareholders approved on Tuesday the takeover of the platinum producer by South Africa’s Sibanye-Stillwater at a meeting in London.

Earlier on Tuesday, Sibanye-Stillwater said 87% of its shareholders backed the all-share offer, which it revised last month to value the struggling Lonmin at 226 million pounds ($286 million), 60 million pounds less than originally proposed.

Lonmin was hit hard by the drop in platinum prices and has had to cut spending and jobs in order to retain a positive balance sheet, a condition of Sibanye’s proposed offer.

Shares in London-listed Lonmin were up 5.2% at 1131 GMT, while Sibanye’s were up 5.8%.

Sibanye's $286 million Lonmin takeover gets all clear from shareholders

JOHANNESBURG/LONDON (Reuters) - Sibanye-Stillwater and Lonmin cleared the final hurdle to forming the world’s second-largest platinum producer as their shareholders approved the South African firm’s 226 million pound ($286 million)takeover of its London-listed rival.

Lonmin shares rose 7.7% by 1234 GMT, while Sibanye’s were up 8.4% on Tuesday after the majority of shareholders in both firms backed the revised all-share offer, which valued Lonmin at 60 million pounds less than originally proposed.

Sibanye, which also has gold mines in South Africa, has been growing its platinum presence by buying Anglo American Platinum’s Rustenburg operations in 2015, Aquarius Platinum and then U.S. palladium producer Stillwater.

It first proposed buying Lonmin in 2017, a deal touted as the only way to save the cash-strapped company’s 29,000 strong workforce in South Africa where job cuts are politically sensitive as unemployment runs at around 27%.

The deal is seen as a life-line for cash-strapped Lonmin, which was hit hard by the drop in platinum prices and had to cut spending in order to retain a positive balance sheet, a condition of Sibanye’s proposed offer.

“We are very appreciative that shareholders realise the structural challenges that face Lonmin can actually be resolved with the merger to create a more diversified and stronger platform for Lonmin,” Lonmin CEO Ben Magara told Reuters.

Palladium and rhodium prices have recently rallied, giving struggling mining companies a reprieve, but platinum prices are still in the doldrums.

“We believe the acquisition of Lonmin by Sibanye represents the most robust solution to the challenges facing Lonmin,” Renaissance Capital said in a note.

The deal is expected to close on June 7.

Zambia to cancel, delay more project loans as debt soars - finance minister

LUSAKA (Reuters) - Zambia will cancel or delay more approved project loans in a bid to reduce its fiscal deficit and reign in debt service payments, Finance Minister Margaret Mwanakatwe said on Tuesday.

Zambia, which the International Monetary Fund has repeatedly warned is struggling with high debts and shrinking foreign currency reserves, has already delayed receipt of loans worth $2.6 billion in areas such as energy, agriculture and health.

Mwanakatwe told a media briefing on Tuesday that increased debt service payments were having an adverse impact on the budget and there was a need to reduce debts to sustainable levels.

She said she would present a list of project loans in the next cabinet meeting to be considered for slowing down, postponing and cancellation. She didn’t identify any of the lenders or projects likely to be affected.

“In doing so, projects that are of an economic nature will not be cancelled as resumption of growth is important to address the economic challenges,” Mwanakatwe said.

Zambia’s external debt had increased to $10.178 billion at the end of the first quarter of this year from $10.05 billion at the end of 2018, Mwanakatwe said earlier this month.

The country’s 2018 fiscal deficit stood at 7.5% of gross domestic product (GDP), higher than an earlier government projection of around 7%.

A cabinet meeting held on Monday took note of the high levels of debt service costs over the next three years compared with last year, Mwanakatwe said.

Zambia would also urgently complete energy reforms and renegotiate unsustainable power purchase agreements so the sector does not become a liability, she said.

South Africa's rand falls as trade war concerns hurt sentiment

JOHANNESBURG (Reuters) - South Africa’s rand weakened on Tuesday, falling more than 1% in early trade as Sino-U.S. trade tensions dampened market sentiment.

At 0834 GMT, the rand traded at 14.5975 per dollar, 1.2% weaker than its New York close on Monday.

In fixed income, the yield on the benchmark government bond due in 2026 added 8.5 basis points to 8.445%.

On the stock market, both the Top-40 and the broader all-share index were down 0.3%.

Uganda's tungsten mine sues International Tin Association for defamation

JOHANNESBURG (Reuters) - An owner of Uganda’s only tungsten mine is suing the International Tin Association for defamation, saying the certifier wrongly accused it of trading in conflict minerals, court documents seen by Reuters show.

The association’s International Tin Supply Chain Initiative (ITSCI) programme, used by companies such as Apple, was introduced after the 2008 financial crisis to certify minerals in response to regulation which obliged U.S. companies to vet their supply chains.

The International Tin Association’s Kay Nimmo, who leads the ITSCI programme, said in an email she had no immediate comment.

The ITSCI programme, which dominates mineral certification in conflict-ridden central Africa, aims to create mineral supply chains that avoid contributing to conflict, human rights abuses, or other risks such as bribery, according to its website.

Kerilee Investments, the British-based majority shareholder in Uganda-based KI3R, which owns the Nyamuliro tungsten mine, says it was damaged by ITSCI’s malign abuse of its alerting system and negligence in investigation and reporting.

A filing to the High Court of Uganda, dated May 14, charges the defendant “falsely and maliciously wrote and published material alleging that it was dealing in conflict minerals”.

Kerilee says the allegations injured its credit and reputation and it is seeking damages of $998,060 plus interest and public retractions.

“The facts are as we have presented them. We look forward to clearing our name - though we shouldn’t have to,” Brian Beckett, chairman and CEO of Kerilee Investments, told Reuters.

The court filing concerns an alert issued by the ITSCI on Dec. 13, 2017 and updated on Jan. 29, 2018, which said two 18-tonne consignments of tungsten concentrate shipped from the Nyamuliro mine could pose supply chain risks.

KI3R says the consignments were legitimate and ITSCI’s alerts were based on a third-party report, whose veracity it said ITSCI had not independently checked.

It further said it was ignored after writing to ITSCI providing clarification.

A Kenyan court decision in July 2018 led to the release of the containers, which had been impounded in Mombasa, following a delay of around nine months as a result of “the defamatory actions,” the court documents said.

Tungsten is used to strengthen alloys and has applications in the electronics industry.

ITSCI is beginning to face competition from programmes based on blockchain, the technology behind Bitcoin, which provides a way to track mineral movements.

In January, Societe Miniere de Bisunzu, Democratic Republic of Congo’s biggest miner of coltan — an ore in which battery mineral tantalum is contained — said it was leaving ITSCI and would use an alternative scheme because of cost.

MacKenzie Bezos pledges to donate half her $37bn fortune

MacKenzie Bezos, the ex-wife of Amazon boss Jeff Bezos, has promised to give half her fortune to charity.

She joins billionaires such as investor Warren Buffett and Microsoft founder Bill Gates in the Giving Pledge.

The pledge was started by Mr Buffett and Mr Gates and calls for the richest to give away half or more of their wealth.

Ms Bezos is estimated to be worth almost $37bn (£29bn). She and Mr Bezos divorced earlier this year.

She acquired 4% of the company in the settlement.

"In addition to whatever assets life has nurtured in me, I have a disproportionate amount of money to share," she said in a statement. "My approach to philanthropy will continue to be thoughtful. It will take time and effort and care."

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The Bezos backlash: Is 'big philanthropy' a charade?

The Giving Pledge has been signed by 204 individuals, couples and families from 23 countries.

Former New York Mayor Michael Bloomberg, CNN founder Ted Turner and entertainment executive Barry Diller were among the initial signatories in 2010.

Pledges this year have come from hedge fund billionaire Paul Tudor Jones; Jeremy Grantham, who is co-founder of US investment firm GMO; and Emirati businessman Sheikh Mohammed bin Musallam bin Ham Al Ameri.

Public promise

The pledge is a public promise rather than a legal contract, according to its website, which says: "The goal is to talk about giving in an open way and create an atmosphere that can draw more people into philanthropy."

Facebook's Mark Zuckerberg and his wife Priscilla Chan joined the list in 2015, saying they will give away 99% of their shares in the company to good causes.

He said they were donating their fortune to the Chan Zuckerberg Initiative to make the world a better place for their daughter Max to grow up in. The shares, worth more than £60bn, will not be donated to the initiative immediately, but over the course of the couple's lives.

Mr Bezos is not one of the signatories to the Giving Pledge. Last year, he put $2bn into a charitable fund he established to help the homeless and set up a new network of schools.

The move attracted a backlash from some quarters as Mr Bezos has been accused of underpaying his staff.

He is estimated by Bloomberg to be worth $114bn.

Other top-10 billionaires who have not joined the pledge are Google co-founder Larry Page, Bernard Arnault, head of French luxury goods firm LVMH, and Mexican telecoms chief Carlos Slim.

British pledgers include Lord Michael Ashcroft, Sir Richard Branson, Phones 4u founder John Caudwell, Stagecoach co-founder Ann Gloag, Sir Stelios Haji-Ioannou, property developer Sir Tom Hunter, Lord David Sainsbury and oil businessman Sir Ian Wood.--BBC

Real Madrid 'most valuable club in Europe', says KPMG

Real Madrid has overtaken Manchester United and been named most valuable European football club, being worth about €3.22bn (£2.91bn) says KPMG.

The Spanish club tops KPMG's study of top sides' "enterprise value".

The report, based on the 2016-17 and 2017-18 seasons, studied profitability, broadcasting rights, popularity, sporting potential and stadium value.

Champions League finalists Liverpool and Spurs are in seventh and ninth places in the rankings.

Scottish presence

And Europa League finalists Chelsea and Arsenal are in sixth and eighth spots.

Manchester City is in fifth place, meaning there are a total of six English clubs in the top 10.

Real Madrid won the Champions League during the two seasons which the data covers. increasing its enterprise value by 10%.

Scottish treble winner Celtic is included in the list of 32 major clubs, the first team from the country to be so.

Andrea Sartori, KPMG's global head of sports and the report's author, said the overall value of the football industry had grown by 9% over the past year.

"The overall enterprise value of the top 32 clubs is driven primarily by an aggregate 5% increase in total operating revenues," he said.

"On the other hand staff costs continued to grow too, with the average staff costs-to-revenue ratio of the top clubs increasing by four percentage points, up to 63%."

Top 10 European clubs by 'enterprise value'

Real Madrid - €3.224bn

Manchester United - €3.207bn

Bayern Munich - €2.696bn

Barcelona - €2.676bn

Manchester City - €2.460bn

Chelsea - €2.227bn

Liverpool - €2.095bn

Arsenal - €2.008bn

Tottenham - €1.697bn

Juventus - €1.548bn

Source: KPMG

'Absolute dominance'

Mr Sartori added: "At league level the English Premier league has confirmed its absolute dominance, having nine clubs in the top 32 and accounting for 43% of the total aggregate value."

The other three English clubs to make the list outside of the top ten, were West Ham United, Leicester City and Everton.

Meanwhile, Inter Milan (15th) leapt up five places became the second most valuable club in Italy, thanks to a 41% increase in its enterprise value.

This year, 13 clubs were valued in excess of €1bn, one more than in 2018.

And eight clubs reported an enterprise value above €2bn: five from the English Premier League, two from Spain, and one from Germany.

As well as Celtic entering the top 32 for the first time, so do Spanish club Villarreal, with La Liga rivals Valencia and Turkey's Fenerbahce dropping out.--BBC

Johnson & Johnson faces trial over opioid crisis in Oklahoma

Johnson & Johnson, one of the world's largest drug manufacturers, has gone on trial in a multi-billion dollar lawsuit by the US state of Oklahoma.

Prosecutors accuse the firm of deceptively marketing painkillers and downplaying addiction risks, fuelling a so-called "opioid epidemic".

Johnson & Johnson denies wrongdoing and says it marketed products responsibly.

It is the first of 2,000 cases brought by state, local and tribal governments against pharmaceutical firms in the US.

On average, 130 Americans die from an opioid overdose every day, according to the Centers for Disease Control and Prevention.

In 2017, of the 70,200 people who died from an overdose, 68% involved a prescription or illegal opioid.

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In its court filing, Oklahoma alleged that Johnson & Johnson was the "kingpin" behind "the worst man-made public health crisis in [the] state's history," growing and importing raw materials which other drug-makers used for their own products.

What happened in court?

In opening statements in the city of Norman on Tuesday, the state said that Johnson & Johnson along with Purdue Pharma - which produces the prescription painkiller OxyContin - and Israel-based Teva Pharmaceuticals had pushed doctors to prescribe more opioids in the 1990s by using misleading marketing.

State lawyer Brad Beckworth said Johnson & Johnson did so by marketing opioids as "safe and effective for everyday pain" but downplayed addictive qualities and thus helped to create a drug oversupply.

"If you have an oversupply, people will die," he said.

Mike Hunter, Oklahoma's attorney general, told the court that it was time to hold the companies "responsible for their actions".

"This is the worst man-made public health crisis in our state's history. To put it bluntly, this crisis is devastating Oklahoma," he said.

For Johnson & Johnson, lawyer Larry Ottaway said the company's marketing statements were no different to those made by the US Food and Drug Administration in 2009 which said painkillers, when properly managed, rarely caused addictions.

"We're not mocking anyone, but facts are stubborn things," he said.

The courtroom in Norman, Oklahoma, was packed for the hearing

What's the background?

The state argues that Johnson & Johnson created a public nuisance which will cost between $12.7bn (£10.02bn) and $17.5bn (£13.8bn) to remedy over the next 20 to 30 years.

But the company argues that the public nuisance law does not apply in this instance.

Johnson & Johnson - probably best known for its baby shampoo and baby powder - produces a fentanyl patch which can be prescribed for severe pain.

Fentanyl belongs to a class of drugs known as opioid analgesics, which change how the body feels and responds to pain. It is also used as a recreational drug, often mixed with heroin and cocaine.

Because of its high profit margin for traffickers, fentanyl has become a large part of America's opioid crisis.

The latest legal case is the latest in a string against painkiller manufacturers over prescription drugs.

Earlier this month, Teva Pharmaceuticals agreed to an $85m (£67m) settlement with Oklahoma over a similar lawsuit which claimed its opioids had contributed to the deaths of thousands of people.

Purdue Pharma also reached a $270m settlement with Oklahoma in a separate case. The wealthy Sackler family, which owns the firm, has been charged with fraudulently transferring money from the company to protect its funds from litigation.--BBC

British Steel 'has 80 potential bidders'

Government officials say they are making "good progress" in finding potential buyers for British Steel which collapsed last week.

The Official Receiver said it had made contact with more than 80 potential purchasers, 60 of whom have been sent non-disclosure agreements (NDAs).

NDAs give bidders access to information that helps them prepare offers.

"Expressions of interest are due with me by early June," the Official Receiver said in a statement.

"The indemnity provided to me [by the government] has enabled British Steel to continue to trade and the company retains good support from its customers.

"I would like to thank the workforce for their ongoing support. All staff have been retained and continue to be paid."

British Steel collapse threatens 5,000 jobs

Why is steel in the news?

British Steel was placed into compulsory liquidation on 22 May, putting 5,000 jobs at risk and endangering 20,000 in the supply chain.

It followed a breakdown in rescue talks between the government and the company's owner, Greybull Capital.

For now, the government is covering the firm's wage bill.

But if the Official Receiver fails to find a buyer, British Steel could be wound up and redundancies would follow.

Slump in orders

Greybull Capital bought the business for £1 from Tata during depths of the 2016 steel crisis, going on to rebrand it as British Steel.

The private equity firm hoped to turn around the business, which employs most of its staff at plants in Scunthorpe and Teesside, but has more recently run into trouble.

British Steel has been hit by a slump in orders from European customers ‎due to uncertainty over the Brexit process.

British Steel failure: The role of Greybull

What are the EU rules about state aid?

It has has also struggled with the weakness of the pound since the EU referendum in June 2016 and the escalating US-China trade war.--BBC

Boots review puts 200 stores at risk of closure

More than 200 Boots stores across the UK could be closed by its American owners Walgreens Boots Alliance (WBA) in a bid to cut costs.

The shops - which are in areas where Boots has more than one store - are under review for possible closure.

It is understood the review will take place over the next 12 to 18 months.

Boots said it did not have "a major programme envisaged" but was always reviewing "underperforming stores and opportunities for consolidation".

"We are being realistic about the future and that we will need to be agile to adapt to the changing landscape," it added.

The chain has 2,485 stores across the UK, employing about 56,000 staff.

'Lack of investment'

Patrick O'Brien, retail research director at GlobalData warned Boots' review could be too late to address its market share decline.

"Shoppers have been trading down to discounters, and trading up to higher end retailers for more expensive treats and gifts.

"Long term lack of investment in stores has become more noticeable to shoppers, and Boots' dated approach also extends to pricing, where multi-buy promotions and a generous loyalty scheme have made its shelf edge prices uncompetitive with discounters such as Aldi, Lidl and Savers, who have all been eating into its market share in health & beauty," he said.

In April, Walgreens said it would take "decisive steps" to reduce costs as part of a company-wide "significant restructuring".

At the time, Walgreens boss Stefano Pessina said market challenges had "accelerated" in the three months to the end of February, but that it had failed to respond rapidly enough "resulting in a disappointing quarter".

"We are going to be more aggressive in our response to these rapidly shifting trends," he added.

The review of duplicate stores follows Boots' announcement in February that 350 jobs were at risk in its Nottingham head office, amid plans to reduce costs by 20%.

Tough conditions

Boots is one of a string of well-known names suffering in a tough High Street environment.

Last year, Poundworld, Toys R Us and Maplin all went bust and disappeared altogether. Other household names - Homebase, Mothercare, Carpetright and New Look - were forced into restructuring deals with their landlords, closing hundreds of stores.

The increasing popularity of online shopping, higher business rates, rising labour costs and the fall in the pound following the Brexit vote - which has increased the cost of imported goods - have been blamed for contributing to retailers' woes.--BBC

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Dairibord

AGM

Steward Room, Meikles

31 May 2019, 12pm

Lafarge

AGM

Manresa Club, Arcturus

05 June 2019 , 12pm

CBZ

AGM

Stewart Room, Meikles

05 June 2019 , 3pm

 <mailto:info at bulls.co.zw> 

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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