MONDAY, 12.30PM:
THE Atomic Energy Corporation is considering splitting into two divisions, one of which — the commercial division — will be hived off and listed on the Johannesburg Stock Exchange within the next three years. Certain functions, such as nuclear waste disposal, will remain under the control of the state. The AEC is hoping the listing will raise R300-million, which will be used to fund continuing operations and expand its commercial ventures.
AEC executive general manager of finance Sybrand van Vuuren said the listing plans are part of a commercialisation process, started in 1991, to reduce dependance on the state and anticipate an expected dramatic rise in commercial activities in the next three years.
AEC is under pressure to find alternative funding for commercial ventures as its capital fund, consisting of funds collected from selling underused assets, is due to run out within 18 months.
It is currently involved in a joint venture with United States group Dow Chemicals to produce a generic analgesic for the export market, and has formed a radio pharmaceutical company with United Kingdom group Amersham to market products for the life sciences industry.
BUSINESS BRIEFS
SAPPI SELLS US BRANCH
PAPER and pulp group Sappi has completed the sale of its business located in Westbrook in Maine, United States, for R260-million. Executive director of finance Bill Hewitt said the profit on the sale came in at R112-million after tax, about 45c a Sappi share, and the proceeds will be channeled into reducing the group’s debt in its subsidiary SD Warren.
CAN COINS CURE GOLD?
ANGLO American is reported to be planning a joint venture with three other gold producers to produce a series of millennium coins that will mop up over 1000 tons of gold and lift the market out of its slump. Britain’s Sunday Telegraph reported that the initiative is to be led by Canada’s Barrick Gold and co-ordinated from Swiss Bank Corporation’s London headquarters. Other companies involved are Newmont and Placer Dome.
TRANSPORT STRIKE OVER
STRIKING transport workers accepted a lower-than-demanded wage increase on Friday, bringing to an end a five-day strike. The Commission for Conciliation, Mediation and Arbitration negotiated an 11,8% increase for grade five workers, 14% increase for grade four and 8% for additional categories, as well as increased training and maternity leave benefits, and higher subsistence allowances for long-distance trips. The strike is estimated to have cost the industry over R10-million a day.
MERRILL LYNCH ADVISES OLD MUTUAL
LIFE assurer Old Mutual at the weekend appointed investment bank Merrill Lynch’s South African arm Merrill Lynch Smith Borkum Hare to advise it on its impending demutualisation. Other banks with international demutualisation experience short-listed for the role were Deutsche Morgan Grenfell, Goldman Sachs and SBC Warburg Dillon Read. Merrill Lynch was recently chosen to advise South African Airways in its search for an equity partner.