COMPANY NEWS IN BRIEF
Imperial wins SCA bid to liquidate creditorThe Supreme Court of Appeal (SCA) has placed Remnant Wealth Holdings into provisional liquidation following an appeal brought by a subsidiary of Imperial, a multi-national logistics solutions company.
In an appeal against a judgment and order issued by the North Gauteng High Court in Pretoria, which dismissed Imperial's application for the final liquidation of Remnant, the SCA this week set aside that order, and instead ordered that Remnant be placed under provisional liquidation.
According to the judgment, which was handed down on Monday, Remnant was indebted to an Imperial subsidiary – KWS Logistics – to the tune of over R80.8 million.
In 2018, Remnant won a bid to provide logistical services to South 32, a major diversified miner, for the transportation of manganese products from South32's operations in Hotazel and Meyerton to various ports. Because Remnant did not have sufficient trucks to transport the products, KWS provided transport services on behalf of Remnant to South32.
While Remnant received R304.4 million from South32 for the services, it failed to pay off its debt to KWS.
The SCA, in its judgment, found Remnant's reasons for its failure to pay KWS "inexplicable", along with its refusal to account for the revenue received from South32.
Imperial brought the liquidation application on July 2020, arguing Remnant is insolvent and unable to pay its debts and should be wound up as a result. Remnant denied this was the case.
While the high court had dismissed Imperial's application for Remnant's liquidation for want of urgency, the SCA said the court had erred in failing to recognise that winding-up applications are by their very nature urgent.-Fin24
Wimpy optimistic about consumer spending
Even as South Africa battles rising inflation, interest rates, load shedding and political uncertainty, Famous Brands is striking an optimistic note for trade at its quick-service dining, takeaway and restaurant businesses as it heads into the traditionally lucrative festive period.
Releasing results for the six months ended 31 August 2022, the JSE-listed owner of household names such as Wimpy, Steers and Mugg & Bean said a "combination" of the upcoming Soccer World Cup in Qatar, Black Friday specials and the festive season "should boost consumer spending".
But the group also flagged specific South African challenges such as rampant inflation, rising interest rates and the intensive load shedding the country was experiencing at the moment as concerns, adding that global uncertainty and supply chain challenges would also continue to "drive up food prices".
Famous Brands said though that economists predicted SA's food inflation to peak at 10% this year before "receding to more manageable levels in 2023".
It said that managing food costs would be a key focus for the group in its "menu development and promotions".
"We will develop menus which offer and provide good quality at a cost that consumers perceive as good value. Famous Brands will continue to invest in delivery technology to enhance our last mile efficiency for own delivery."-Fin24
Transnet receives R8.5bn in state support
State-owned logistics company Transnet is to receive its first cash injection from the fiscus in decades as it battles to recover from flood damage and a shortage of locomotives due to contractual problems with manufacturers.
Finance Minister Enoch Godongwana announced R5.8 billion of support for Transnet in the Medium-term Budget Policy Statement. The money is allocated specifically for repairing infrastructure damaged by the recent floods and R2.9 billion to procure spare parts and new locomotives from China's CRRC Corporation.
Transnet has been in dispute with CRRC for several years after it terminated an extensive procurement programme for new locomotives mid-stream, as the contracts were tainted by corruption. In response, CRRC refused to supply the locomotives that had been procured with spare parts.
Due to the dispute with CRRC and other manufacturers, Transnet Freight Rail (TFR) has 331 "long-standing locomotives" that it has been able to use. Earlier this month, the company announced that it had reached an agreement with CRRC and that the supply chain would be reinstated.
The cash injection for Transnet will assist the TFR to arrest falling volumes and revenue. Volumes have been falling since 2018. In 2018, it moved 215.1 million tons (mt) but by 2021/22 this had fallen to 172.7mt.
The company is in a race against time to improve its revenue flows to avoid recurring liquidity constraints. In July, facing a liquidity crunch, Transnet raised a US$1.5 billion loan and a R12 billion bridge-to-bond facility which it will need to convert to a longer-term loan during 2023/24.-Fin24