BUSINESS MAVERICK

Fear and Loathing at Survé-owned The African News Agency

By Sasha Planting 6 September 2019
Caption
Iqbal Surve, Sekunjalo Group CEO on February 22. 2013, in South Africa. (Photo by Gallo Images / Foto24 / Lerato Maduna)

The African News Agency rose like a phoenix from the ashes of the once-proud South African Press Association. Now it is restructuring its editorial team, the bulk of its workforce. One wonders whether the phoenix will still fly.

Journalists and photographers at the African News Agency (ANA) a news and content syndication service, were issued with Section 189 retrenchment notices on Friday September 6.

As many were encamped at the World Economic Forum or the #NoToWomenAbuse marches last week, management delivered the news of the impending notices via email. The reason given was simply that an “editorial restructure” was necessary.

About 25 people are employed at ANA, which was launched in Cape Town in February 2015 by Iqbal Survé, chairman of Sekunjalo and executive chairman of Independent Media.

The launch of ANA followed the liquidation of the South African Press Agency (Sapa), which was established by major South African newspapers in 1936 and was the country’s only independent national wire service.

Sekunjalo Investment Holdings acquired Sapa’s assets for an estimated R8-million, which included the brand name, news and pictures archives. The aim was to protect and safeguard the Sapa brand, considering the important role it played in South Africa’s media history, the chief executive of ANA, Chris Borain, said at the time.

And so ANA started out life with 26 staff and plans to operate off a lean budget. According to the company’s website, it has forged alliances with trusted news partners across the continent and the world.

“Together we cover the globe and our own ANA Correspondents provide first-hand accounts of breaking news.”

However, since then the world of media has significantly changed. In the letter to staff CEO Grant Fredericks explained “that the constant pressure on the Syndication Business Industry with declining revenues, increasing costs and the continued competition brings us to a point where we have to review our team structures, reorganise our workflows and reposition the business as an African-focused content curation platform, for the global market.”  

The wire service announced that it will shortly open offices in a number of African countries to service the growth the agency has experienced in its content curation service over the past 12-months.

The countries where ANA News will expand its operations will include Nigeria, Kenya and Egypt, with further offices to be announced in due course.

 “The appetite for African-centred content curation to the world and across Africa, has grown significantly, and the company is optimistic as to the long-term prospects for the agency, which has led has to this fortunate business development,” Fredericks wrote.   

 However, this headway has not been mirrored in South Africa. The constant pressure on the syndication business industry coupled with declining revenues, increasing costs and continued competition in the traditional and syndication media space, has led ANA News to a point where it has had to review business efficiencies and reposition its current business.  This has led to rationalising operations, including due thought to the skills required to service the content-curation business where the agency now finds itself expanding. 

The company expects that 24 jobs will be affected, with 14 positions being made redundant.

 In 2015 ANA was injected into Sagarmatha Technologies by Sekunjalo. Another vehicle belonging to the Survé family trust held a small stake in it. In addition, the China Africa Fund acquired 5% of the company for R357-million in 2015, according to this amaBhungane article. This valued the agency at an eye-watering R7.14-billion.

In 2015, ANA’s sales reached R8.3-million, with operating losses of R22.5-million.

In 2016, sales reached R13.9-million but operating losses rose to R27.1-million; in 2018 sales quadrupled to R60.9-million with operating losses easing slightly to R19.9-million, according to Sagarmatha’s annual financial statements (AFS).

The business has assets worth R277.9-million and liabilities of R9-million according to the latest AFS.

But ANA is more than a noble business whose goal is to tell the untold stories of the African continent. Its valuation supported that of Sagarmatha Technologies.

More than that, in a series of transactions referred to in the same amaBhungane article, Survé appears to have used the acquisition of, and investment into ANA as a vehicle from which to acquire a greater shareholding in Sagarmatha – almost for nothing. 

At the conclusion of the transactions, which involved the Survé family trust, ANA and Sagarmatha, ANA was revalued at a still high R2.7-billion. In the process, Survé landed up with 95.9% of Sagarmatha, which he achieved seemingly in exchange for 20% of ANA.

Survé did not respond to requests for comment, but did reply via formal letter subsequent to the publication of this article. 

Your article appears to be yet another attempt to rake the ashes of previous DM articles, which have themselves been found wanting in their accuracy, in order presumably, to continue with your ongoing narrative against me. 

“To provide you with the accurate information your article should have conveyed in the first instance, please see ANA’s statement below, which should answer your question as to whether or not ANA will continue to be a going concern – as you will see, it will most certainly survive, and thrive, given its intended focus.

The statement is below. BM

This story was updated post-publication to include ANA’s formal response.

STATEMENT

 

African News Agency News to Open New Offices Across Africa

Expansion in Africa but possible downsizing in South Africa

 

The African News Agency News (ANA News), was launched in 2015 after Sekunjalo Investment Holdings acquired the former independent national wire service, South African Press Association (SAPA) post its demise, employing in the process, former SAPA employees.  Since then, the world of media has significantly changed with ANA today announcing that it will shortly open offices in a number of African countries to service the exceptional growth the agency has experienced in its content curation service over the past 12-months.

 

The countries where ANA News will expand its operations will include Nigeria, Kenya and Egypt, with further offices to be announced in due course.

 

The appetite for African-centred content curation to the world and across Africa, has grown significantly, and the company is optimistic as to the long-term prospects for the agency, which has led has to this fortunate business development.

 

However, this headway has not been mirrored in South Africa. The constant pressure on the syndication business industry coupled with declining revenues, increasing costs and continued competition in the traditional and syndication media space, has led ANA News to a point where it has had to review business efficiencies and reposition its current business.  This has led to rationalising operations, including due thought to the skills required to service the content-curation business where the agency now finds itself expanding.

 

The company is greatly saddened by the possibility of cutting back its local office contingent but, after due and lengthy review of the economics and deliberation of numerous alternatives, the company is of the opinion it does not have any other option.  This decision has not been taken lightly, with several alternatives having been considered prior to embarking on this action.

 

As a result, and in accordance with the law, ANA News will shortly begin Section 189 discussions with employees in the South African office, to ascertain possible re-positioning of key staff, and in order to mitigate circumstances so far as possible.  Affected parties were issued with a comprehensive explanation as to the reasons for this decision today.

 

ANA News deeply regrets the need to implement such measures and the requirement to announce such on the back of the growth of its content-curation business.

 

Issued by:

ANA News

6th September 2019

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