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8Tuesday April 2, 2019 Da i ly D isp atc h

TJ STRYDOM

Motorists will this week get theirsteepest increase at the pump in fouryears as the recent slide in the rand andhigher global oil prices are passed on anda hike in government levies takes effect.

The retail price for 95octane petrol is set torise R1.31 per litreinland on Wednesdayand R1.26 on thecoast, the CentralEnergy Fund said onSaturday. Diesel prices willrise about 82c. These increases wereannounced by finance minister T itoMboweni in his budget in February.

The increases will pile pressure onconsumers who face another bout ofelectricity price hikes. Prices rise 14% fordirect Eskom customers on Monday andfor a similar amount for municipalcustomers on July 1. — B D L ive

b r i ef i ng

Crashing rand hasfuel up to new high

HOW TO PLAY:Every digit from 1to 9 must appearin each of thenine verticalcolumns, in eachof the ninehorizontal rows,and in each ofthe nine boxes.Solutions, tipsand a computerprogramme canbe found atw w w. so d u ku .co m

K N O W L E D G E I N T O W E A LT H

To d ay ’s Puzzle

Ye ste rd ay ’s Solution

MAJOR MOVES UPS h a re n a m e Sale % MoveSABVE ST 5980 25.24 %U N ICO RN 25 19.05 %CI L 275 14.58 %WO R K FO RCE 180 12.50 %WE SI Z WE 45 9.76 %T EX 429 7.25 %EO H 1108 6.54 %WI LD RN E SS 740 5.71 %ALV I VA 1787 5.43 %P ICKN PAY 7000 5.41 %I NSIMBI 98 5.38 %OAN D O 20 5.26 %BLACK STAR 342 5.23 %MA SSMART 8350 5.03 %A-V- I 9483 5.03 %MET RO F I LE 148 4.96 %

Rand / Cu r re n cy RR/Australian $ 10.27R/Botswana Pula 1.35R/Brazilian Real 3.72R/British £ 18.99R/Canadian $ 10.84R/Chinese Yuan 2.16R /Euro 16.28R/Indian Rupee 0.21R/Japanese Yen 0.21R/Kenyan Shilling 0.14R/Mozambique Met. 0.27R/Namibian $ 1.02R/New Zealand $ 9.83R/Russian Rouble 0.22R/United States $ 14.49R/Zambia Kwacha 1.20

Exchange RatesMovers & Shakers

MAJOR MOVES DOWNS h a re n a m e Sale % MoveAVEN G 2 -33.33%V IS UAL 3 -25.00%CALG RO 512 -16.75%BAU BA 47 -14.55%EF F ICI ENT 410 -7.87 %G RIT RE 1820 -6.38 %MC Z 850 -5.56 %BE E-SASO L 27000 -5.26 %A ME 3510 -5.14 %MASTD RI L L 1050 -4.55 %T RUSTCO 1000 -4.49 %OMN IA 4867 -4.38 %Tre l l i d o r 400 -4.31 %RO LFE S 225 -4.26 %LO NMI N 1378 -3.91 %SI BANYE 1512 -3.88 %

Name RP % MoveDJ Futures 26120.50 0.72 %DJ Ind 25928.68 0.82 %FTSE 100 7329.40 0.69 %DA X 11671.61 1.26 %CAC 4 0 5391.75 0.77 %N i k ke i 21509.03 1.43 %S h a ng h a i 3170.36 2.58 %H a ng-S e ng 29582.50 1.83 %ASX All 6299.70 0.61 %Gold $ 1291.26 -0.06 %Gold R 18377.74 -1.91 %Gold R/Kg 590844 -1.91 %Brent Crude 69.23 1.41 %Silver $ 15.1145 -0.14 %Platinum $ 849.50 0.15 %Palladium $ 1347.75 0.44 %

Spot Prices

(These are the banks’ selling rates yesterday.) (For real-time spots, SMS the word SPOTS to 34019.Charged at R2/SMS.)

Jonathan Goldberg

Wh at ’s your approach to a resignation?wo r k wise

Do you have a question or a problem regarding labour law? Send an e-mail with your query to news@dispatch.co.za

In the relationship between you andyour employees, you will haveindividuals in your company whoare duly authorised to concludesignificant events in the employer-employee relationship. Twoexamples of these are entering intoan employment contract andaccepting a resignation. These dulyauthorised individuals need to beclearly earmarked as, if they are not,you could end up being liable forsome hefty penalties.

In Mazibuko / Association ofMineworkers and Construction Union -(2018) 27 CCMA 6.13.7 also reported at

[2018] 8 BALR 867 (CCMA):• The employee, a trade union's

regional organiser, tendered a writtenletter of resignation to the employer.

• The union's general secretarypersuaded him to withdraw hisresignation. The employee did so inwriting and thanked the generalsecretary, in writing, for his “wisd o m”.

• The employee then received aletter, from his employer, informinghim that his last day of service wouldbe the end of the period of notice hehad given in his original resignationl ette r.

• The employee claimed he hadbeen unfairly dismissed. The employer

maintained that his services hadterminated as a result of hisre sig n ati on .

• The Commissioner at theCommission for Conciliation,Mediation and Arbitration (CCMA)noted that the employee had workedafter the period of notice given in hisresignation letter and had beenallocated to work on another case setdown at a later date.

• The union argued that theargument which held that the generalsecretary lacked the power to allowthe withdrawal of the resignation wasfound to be improbable. TheCommissioner also drew a negative

suggestion from the fact that thegeneral secretary had not been calledto testify.

• Although a resignation normallyterminates employment, in this case itwas clear from the general secretary’saction that the relationship had beenre sto re d .

• The employee was awardedcompensation of three months’ s a l a r y.

● Jonathan Goldberg is CEO ofGlobal Business Solutions.

In this weekly column, labour lawyerJonathan Goldberg looks at variousaspects of labour law. Readers can e-mail questions to news@dispatch.co.za.

ANN CROTTY

Embattled global retailer Stein-hoff International’s path hasbeen cleared to implement aprocess in the UK that willprovide it with breathing spaceto restructure its balance sheet,which is laden with €9.4bn(about R153bn) in debt.

Steinhoff ’s attempt to im-plement a company voluntaryarrangement (CVA) in the UK aspart of a bid to get its globaloperations back on track hasbeen stymied since January byopposition from LSW GMBH, a

group understood to have linksto its former partner AndreasSeifert. On January 10, LSWchallenged the CVA on thegrounds of an alleged debt ofabout £291.4m it was owed bySteinhoff Europe.

CVAs are used in terms of UKlaw by financially distressedbusinesses to come to an agree-ment with unsecured creditorsand are often able to securemore favourable rental agree-ments. Steinhoff ’s CVA wouldfreeze debt repayments forthree years.

Steinhoff International will

now be able to go ahead withthe CVA having reached a set-tlement with LSW, it an-nounced on Friday. It has alsoextended the deadline for theclosing of its restructuring ar-rangement to May 31 2019.

The hostilities betweenSeifert and Steinhoff are be-lieved to date back to Seifert’ssale of half of his German fur-niture chain POCO to Steinhoff.LSW is understood to be anentity related to Seifert and hashad a dispute in Austrian courtsagainst Steinhoff Europe since2015. — B D L ive

Steinhoff gets some UK relief

SISEKO NJOBENI

S A’s construction industry erredby securing work at low mar-gins to maintain capacity wheninfrastructure spend dried up,says Basil Read chief executiveKhathutshelo Mapasa.

Basil Read went into businessrescue in June 2018. At the timethe company said its construc-tion business, which consists ofroads, buildings and civils, hadexperienced cash-flow prob-lems because of “m i s m atc h e dcash inflows and cash out-f l ows ”.

The company attributed thecash-flow difficulties to, amongothers, claims taking longer tor e s o lve.

“You have to tender with mar-gins that support your business.You must tender for profitableprojects. Then you must have avery strong execution capabil-ity. The reason constructioncompanies are in this state isbecause we have so much ca-pacity, we ended up under-cutting each other to securejobs. Before the 2010 Fifa WorldCup, we were pushing workaway, ” he said.

Since the World Cup, infra-structure expenditure has beenin decline, he said.

Mapasa said despite the fall inthe number of projects, con-struction companies had beenreluctant to reduce their work-forces, hoping governmentwould increase infrastructurespending.

“You end up securing work atzero percent margins just tokeep your capacity. That hasbeen the fundamental flaw inthe thinking. You can only sus-tain the lean period for a shortperiod. That is where we got itwrong. If I look at the portfolioof Basil Read (construction)projects, almost all of themwere loss-making from the

word go. We believed that thisinfrastructure spending is goingto come back,” he said.

Analyst Ian Cruickshanks atthe weekend said constructioncompanies should resist theurge to settle for low margins.

“No business should tenderfor a job where the return oncapital employed is not betterthan what you would get if youhad put it in the bank. There isno point of doing so just to holdon to staff. Nobody knows howlong this downturn is going tob e, ” Cruickshanks said.

Mapasa said Basil Read had tobe “in better parts” of the con-struction value chain. He saidthe group should aim for so-called design, build and operatecontracts, whereby a contractoris appointed to design and builda project and then operate it fora period of time. He cited the StHelena airport project.

“You have to focus on whatyou are capable of doing. One ofBasil Read’s problems is that wegrew from a R400m company toa R6bn company through ac-quisitions. We acquired all sortsof businesses. You look at thisand ask what is your core com-p e t e n ce, ” Mapasa said.

He said the company’s futureplans included reducing itswork in construction “to a min-imum” and paying off its debt.When Basil Read went intobusiness rescue the companyowed R400m. “The claims noware north of R1bn,” he said.

Basil Read’s mining and de-velopments businesses, whichare separate legal entities, weresuccessful and self-sustaining,he said.

There was a reasonableprospect that the company canbe rescued, he said. The ob-jective of the business rescueplan was to wind down loss-making contracts within con-st r u c t i o n . — B D L ive

Sector ‘erred bycharging cheap’

TED KEENAN

Eastern Cape MEC for econom-ic development, environmentalaffairs and tourism OscarMabuyane had some toughmessages for exporters at theEastern Cape Export Sympo-sium held in East London lastwe e k .

“We are going to liberate our-selves in this province from thistendency of walking while oth-er provinces are running toreach their developmentalgoals. If there are flat tyres onthe way, we will replace them,”he told the audience.

He urged the Eastern Cape tolift itself from fifth position interms of its contribution to na-tional exports, which left it lag-ging behind Gauteng, WesternCape, KwaZulu-Natal andNorth West. “We must aggres-sively enhance productive ca-pacity in our province to exportquality products to Africa – andthe rest of the world.”

He said the export base mustincrease in terms of new andemerging exporters, throughsector diversification and a con-ducive business environment.

Mabuyane said that EasternCape’s exports had been on arollercoaster ride since the crip-pling years of 2012 to 2015 – theworst period for the province asthe value of imports had ex-ceeded the value of exports.

“During this period, importsincreased as a result of demandfor textile, clothing, leather,chemicals products, rubber andplastic products, metal prod-ucts, motor vehicles and fur-n i t u r e. ”

This changed in 2016, when a

positive trade balance of R2.6bnwas recorded.

“However, this was short-lived as the economy again reg-istered a trade deficit of R3.8bnin 2017. Volatile market trendsthroughout 2018 . . . saw apositive trade surplus of R4.2bn,as a result of significant increasein exports,” the MEC said.

Eastern Cape exporters faceseveral challenges, as do na-tional exporters. These includestiff international competition,sourcing buyers, high costs ofmarketing, transportation andlogistics, and a volatile exchangerate. Mabuyane said one of thebiggest, but solvable problems,was the red tape involved inobtaining export documenta-

tion.“The next government after

the election will liberate ourexporters from the red tapechallenges. We will be movingaway from simply acknowledg-ing the problems to taking ac-tion to remove impediments toexport trading. The investmentson socio-economic infrastruc-ture and reduction of produc-tion costs, including municipalrates, which will be a thing ofthe past.

“The ECDC, in conjunctionwith provincial and nationalpartners such as the depart-ment of trade and industry, isdirectly involved in providingopportunities to export-readyEastern Cape businesses.

“In the financial year 2017-18,80 companies participated inthe missions, while in the 2018-19 financial year, 39 companiesparticipated in the trade pro-motion missions.

“In terms of export devel-opment, 135 companies weretaken through export aware-ness and training sessions in2017-18 and in 350 companiesparticipated in the 2018-19.”

He said there was huge po-tential in agriculture, that wasnot realised due to land andwater resources impediments.

He said African markets werepotentially a major source ofexports, especially since theAfrica Free-Trade Agreementwas signed in 2018.

M a buya n e’s tough-talkingact to province’s exporters‘Business must focus onproductive capacity toachieve market foothold’

EASING UP:

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Market Wrap

Bourse boosted by global gains

The JSE pushed higher in broad-based gains

on Monday, tracking gains in global markets.

The all-share added 1.15% to 57,109.6

points and the top-40 rose 1.2%. Banks

added 3.72%, financials 2.38% and general

retailers 2.39%. Gold miners lost 2.99%.

Kumba Iron Ore gained 4.35% to R449.

Standard Bank jumped 4.48% to R193.53,

Absa 4.54% to R159 and Nedbank 4.01% to

R261.32. Mr Price leapt 3.57% to R196.29

and TFG 3.56% to R168.80. British American

Tobacco fell 2.59% to R582.39.

Gold was flat at $1,292.38/oz, while

platinum added 0.45% to $855.08. Brent

crude was 1.38% higher at $68.52 a barrel.

The rand strengthened 1.11% to R14.18/$,

1.2% to R15.93/€ and 0.67% to R18.60/£.

–BD l ive