BIZ BRIEFS
Choppies closes shop in SA
Botswana food retailer Choppies has sold its South African outlets and distributing centres for R1 to privately held investment vehicle King Investments after trading at a loss for the past two years. In a Sens announcement, the company said poor cash flow resulted in trader creditor suppliers not being paid on their applicable due date and hence refusing to supply stock. “This caused stores to become understocked and lose market share, exacerbating the losses.” It said the company was no longer able to fund the losses of its South African subsidiaries from Botswana. Choppies said its failure to service debt exposed it to threats of application for the winding up of its South African subsidiaries. King Investments, which will take over all the subsidiaries’ debt, is obliged to make an immediate, interest-free loan of R100-million to Choppies Supermarkets SA to fund immediate working capital requirements and purchase stock.
Busa warns of recession
Business Unity South Africa (Busa) said another recession is looming because very little is being done to change the trajectory of the economy. Busa’s statement follows Statistics South Africa’s release of the gross domestic product for the third quarter, which showed that it had contracted by 0.6% — and that most sectors contracted, the biggest being mining, which dropped by 6.1%. Busa said the government and all South Africans can no longer put off making tough choices and that costly and bankrupt state-owned enterprises such as SAA needed to be restructured to ensure sustainability and save some jobs. “Business has repeatedly put up its hand to be a partner in inclusive economic growth. Instead, business concerns about the economy are met with suspicion,” Busa said.
Rio Tinto closes SA mine
Global mining company Rio Tinto has halted operations at its Richards Bay Minerals (RBM) unit in Kwazulu-natal because of an escalation in violence. There has been an increase of criminal action against RBM employees, one of whom was shot and seriously injured a few days ago. “The safety of our people is Rio Tinto’s key priority and we have taken decisive action to stop operations to reduce the risk of serious harm to our team members. We are in discussions with the local communities, regional and national governments, and the police to address safety and security issues,’’ said Bold Baatar, RBM chief executive. The mine is operating at a reduced level with a minimum number of employees on site.
Christmas gift: Petrol price hike
The department of mineral resources and energy has announced a petrol price increase of 22 cents a litre for both 93 and 95 octane, mainly as a result of the average Brent crude oil price increasing from $59.72 to $62.68 a barrel. The increase is seen as a response to the Organisation of the Petroleum Exporting Countries extending its production cut into mid-2020. South Africa’s fuel prices are adjusted on a monthly basis, on a formula informed by international and local factors. The price of diesel with 0.05% sulphur content will fall by 14.95 cents a litre, while diesel with 0.005% sulphur content will drop by 15.95 cents a litre. The price of diesel decreased because of “seasonal decline in demand and ample refinery supplies”, the department said.