Looks like our expectations re Solenta are coming to pass.
I know Law Masha; he is a savvy lawyer who is porbalby looking to re-start his political carrer having surprisingly lost his Mwanza seat in the last election.
I think he was on the original Ed Winter crafted board back in the days of great optimism and is/was Chairman of Associated Portland Cement plus other buisness interests so no placeman.
THe mandate I would suggest is to merge FJET TZ in to Air Tanzania
Looking back over this saga I still pin point Winter's unfathomable decision to involve FJET in FLY540 without, it would appear, any substantial due diligence, and his weakness forr Anglo expats over line professionals
I am closing the book now.
I think Edenville Energy are the cause of their own problems as they have been unable to meet contract obligations on coal; but Magafuli is certainly frightening a lot of people
ZMW fall 15% in 3 days following suspension of donor funding, evidence of systematic fraud by senior gocernment
government officials-and growing concerns over debt burden. Big forex loss coming up as before close of 2018 year end
Figures published in TZ suggest ATC market.share has increased from 4% to 20% with FJET and Precusion both on around 40%.ATC booked out on the KILI route for a couple of weeks.but likelyn WOW factor of.flying Dreamliner. May.explain increased FJET capacity on route.
Fjetcrazy, I think we saw the Solenta game plan in its gestation. "Creditor Reduction" ?! So suppliers are withdrawing credit and will only accept cash against delivery. The Zimbabwe bank mess obviously has had an extremely negative impact but probably has only accelerated the crunch point. If whispers start that FJET is going bust then PAX numbers will no doubt fall away. Shareholders look like getting nothing. Plenty of warning signs along the way. Obviously I have developed Stockholm Syndrome as far FJET is/was concerned.
I ,disappointed that the share price not only did not progress further but has actually retreated back down There seem three reasons
1 People are worried about the Zambian economy the implications for the growing government debt the slowdown in the.economy and.the implications for consumer spending. Tje.comparative stability of the ZMW.is not.sustainable.and.BOZ will have to raise interest rates
2 The sharp decline in,soft commodity prices esp soya which is now.barely above.$,900 probably a victim of the USD CHINA trade spat
3 Rising USD interest rates so the non core disposals better happen soon
Retail is very positive and there should be no repeat of rhe wheat disease disaster so hopefully the obstacles can be overcome by the end of year report
WHat is the state of play with our presence in Dodoma? Magafuli has made the decision that Domoma will be unquestionalby the political centre of Tanzania and so far 16 ministires, the Prime Ministers office and various regulatory bodies have been moveed out of Dar to Dodoma. The President's Office will follow early next year while around 60 foreign embassies will follow. As a result Dodoma is subject to a massive redevelopment effort and supporting plan which is likely to grow the city three-fold. Dodoma airport has been upgraded and can operate 24 hours a day but can only handle aircraft in the 70-90 pax range; moreover, it is slap bang in the middle of a major redevelopment area and plans are for a new airport to be built 10 km north of the city to full international standards. A new high speed ( for Africa = 160 km/hour) is currenty being built from Dar with modern carriage stock and engines envisaged and this will take 3 hours/4 hours so competitive with air travel given the congestion making the trip from DAR airport to the CBD and The Peninsular a major logistic effort. Notwithstanding given the likely high volumes of pax needing to travel between DAR and Dodoma, anf the limitation on aircraft size, flight load sshould be consistently high so worth having a reasonable presence
Fjetcrazy, interesting if it were a permanent grounding, but isn't this a political manouvre by Pravin Gourdan to dismiss the board ( corrupted absolutely by the Guptas and state capture) and replace it with one of his own choosing under the guise of maintenance issues, serious as these seem to have been. What would be possibly more revealing would be the plans for Transnet and whether there will be major amputation at Express and Airlink as well as SAA. My take is that culling Express may be difficult on account of the reliance of signicant second tier cities on its route map but that Airlink may have to shed a number of interesting routes.
"Things just happen" and it does appear the FJET have hit an unfortunate run of negative events; but with a large loan to service at increasing rates in the absence of expected revenues and the $5 million still apparently somewhere in the black hole that is the Zimbabwe banking system, does anyone else feel that a further cash call is becoming a possibility. If so interesting if this triggers a take over move by our major partner/shareholderr. With the results looking to be held back until the last possible moment I cannot anticipate anything positive.
My take is that the headline figures for the half-yearly results will be good. Unfortunately I think that the guidance may be more guarded. I have to admit to being toally caught off guard by the deterioration of GRZ finances highl;ighted by the revelations in Africa Confidential and the uncovering of mega corruption in loan arragement and tenders that points to some sort of of state capture. Worse case scenarios indicating.total debt exceeding 100% of GDP and a growing liquidity crisis. No doubt responding to this backcloth, the ZMW//USD exchange rate has declined around 12% from its 90 day peak ( all of this post the March 31 cut off date for financial reporting ) with the yield for Zambia's Eurobands pushing through 10%. I suspect domestic interest rates could move noticeably higher as GRZ relies incresingly on this channel of fundign as access to overseas funding closes. Will look to book any 2018 gains and watch from the sidelines in 2019.
The FMD outbreak seems to be Sero 0 which type would be new to Zambia. It is quite widespread in East Africa and could have spread across a porous northern border. Chisamba is on the main road to Tanzania. The government claims 5000 animals are infected but that a vaccine has arrived and vaccination starts ths week. We will see. However, I have not heard of any escaltion of the problem but that is not to say that there is some concern. I am long term more concerned( more generally about Zambia) about the Land Reform Consultative Paper that has just been issued which favours very much indigenous Zambians and seeks to impose restrictions on non Zambian citizens and foreigners purchasing and amintianing land/property. The term of a holding lease for the latter category is being proposed at 25 years from 99 years, and the measure could be retrospective. A lot of space between lip and cup, but it would appear that the Paer is already having an effect with some developments cancelled.I think Zambeef would on the whole be OK.
Fatherelmer, if we remain in the game, say with Solenta paper, I guess that is no bad thing given that Solenta seems to be well regarded in this part of the world. But if we are bought out with cash I cannot see too much premium on the current share price, all the more so if the Zimbabwe induced liquidity squeeze forces FJET's hand.
G.BOAE, Thank you for an informed post. My take,and concern, is that we are being positioned for takeover creep by Solenta especially if they want to reverse into a London listing.At the same time loss of access to the $5 million in Zimbabwe, temporary but for how long,must be squeezing working capital to the extent that current operations must be under.some pressure.
The strain of FMD requires the vaccine to be imported.from the.UK. Those mostly impacted.are white commercial farmers in the ZAMBEEF supply.chain. I note BLOOMBERG is repeating the.debt concerns raised last week in Africa Confidential and that the Zambia Eurobonds have come under some pressure..
DD77 I agree. Price to Book and Price to Sales are incredibly low; cash flow coverage of the debt and overall gearing are satisfactory while a recovery in profits to 2016 levels would see earnings per share of around 3p. Operationally the retail side is performing very well on the back of the Shoprite tie-up, while feedstocks is expandng and commodity prices are off the bottom, exchange rates are stable and no deterioration flagged in West Africa. Presumalby the very guarded commentary on FMD have reminded shareholders of the propensity of ZAM to be shot in the foot by significant negative exceptional items, both endogenous and of their own making. I will stand by my forecast of northwards of 20p.