Bidvest share price drops after writing down Comair

Bidvest to take profit hit after writing down Comair

2020-06-01 11:28:00 PM

Bidvest to take profit hit after writing down Comair

Airline operator hit by national lockdown that suspended air travel

karl gernetzky and Odwa MjoPicture: SUPPLIEDBidvest, which owns more than a quarter of aviation group Comair, had its worst day in six weeks on the JSE after it said on Monday that it has fully written down its investment in the airline.The company’s share price fell 5.83% to R143, its biggest drop since April 16, after it said in a trading statement that recognised a gross capital impairment of R232m, while its share of Comair’s operating losses was R209.7m.

COVID-19 in SA: Over 9,000 new infections in one day A dexamethasone producer in SA has sold out its stock - as demand for the Covid19 drug surges The Full Story: Zondo Commission testimony fills key gaps in Lucky Montana's R45m 'bribery' scandal | Fin24

The airline operator was significantly affected by the national lockdown as air travel was suspended since late March. As lockdown restrictions have been eased to level-three, the government has permitted limited domestic flights from June 1.Comair, which operates budget airlines Kulula.com and British Airways flights in SA, went into business rescue in May and was suspended from the JSE after Covid-19 grounded aircraft, but its business rescue practitioners, Shaun Collyer and Richard Ferguson, have said there is a reasonable chance the business can be saved.

“In light of this, Bidvest believed it prudent to fully impair its investment in Comair. As a consequence, Bidvest will also no longer equity account Comair,” the company said. Bidvest holds a 27% stake in Comair.Comair’s business rescue plan is likely to be published on June 9 while a shareholder vote to approve the plan will be held on June 24.

Bidvest said on Monday it continued to battle with the impact of Covid-19, SA’s weak economy and a decline in the share price of Adcock Ingram, in which it has a controlling stake.“The expected impact of a peak in Covid-19 infections on our employees, and our ability to deliver products and services to our customers, is being carefully considered. The operating environment remains very uncertain for the balance of financial year and forecasting is impractical,” Bidvest said.

Graphoc: RUBY-GAY MARTINThe company, which provides freight, financial and hygiene services, warned that a strategic review of all its businesses and right-size operations could lead to retrenchments in all of its six divisions.“Industries that are under incremental pressure include travel, and related activities, while out-of-home hygiene services offer good structural growth opportunities,” Bidvest said.

The group, which acquired British hygiene business PHS for £495m in December said the hygiene market remains resilient amid an increasing need for out-of-home hygiene services due to Covid-19.“This is expected to accelerate the development and maturity of the industry globally,” Bidvest said.

Headline earnings per share in the group’s year to end-June are expected to fall by more than 20%, it said, adding it may issue a more detailed trading update. Read more: Business Day »

Oil down as cautious traders await Opec+ meetingPrice falls come after front-month Brent and WTI prices posted their strongest monthly gains in years in May

CLAIRE BISSEKER: Reserve Bank in the sights of scapegoat huntersFortunately, its battle-hardened governor Lesetja Kganyago is no pushover, writes Claire Bisseker Very interesting that ClaireBisseker doesn’t tell us why QE or any other “unconventional” monetary policy isn’t good for SA and why she believes public ownership of the SARB is a bad thing. I wonder if there is some evidence for her views or it’s just dinner banter

Petrol price set to increaseThe Department of Mineral Resources and Energy says the increase is due to higher oil prices. Yeah sure lets over burden our already struggling workers My car drives beautifully when low on petrol, it drives smoothly, when it has petrol it becomes heavy.Tomorrow will have to pour petrol 😭😭😭😭😭 Wow really it's Happy New Level can we enjoy it in peace.

Babelegi guilty of excessive pricing on dust masksCompetition Tribunal fines industrial clothing supplier for inflating prices

‘We can all share the slice’ – Recording reveals Sisulu adviser discussed sharing R200m emergency tenderA recent recording reveals a senior “adviser” in Lindiwe Sisulu’s team hatching a plan with his two subordinates to siphon part of the R200m pledged to water-starved residents in QwaQwa Not at all surprised. We still don't have running water in some areas, even after the minister visited in Feb. CyrilRamaphosa LindiweSisuluSA you guys just sit and watch as your deployees continue to strip our people of all their dignity; it was the parcels, we’ve also seen the terrible quality of the masks being sent to schools and even now with the water? WaterCome on man! 🚮💔 I am sure that the NPA and Hawks are still investigating my only hope is that a forensic investigation goes back 15 years, that there is a paper trail for all the funds, what was accomplished where and at what cost?

Firm slapped with R76,000 fine for excessive pricing on face masksThis is the country's first contested excessive pricing case in the context of Covid-19, as other companies reached consent agreements with the commission after admitting guilt over excessive pricing.