Mon, 09 Dec 2019

The SA government has laid out a timeline for the restructuring of Eskom and pledged that creditors of the state-owned electricity company won't suffer losses, according to a fund manager who attended a briefing by National Treasury.

Treasury Director-General Dondo Mogajane set out the steps in a meeting with investors in London on Tuesday, according to the person, who asked not to be identified because the event wasn't public. The Treasury declined to comment, saying the meeting "was held behind closed doors."

According to the fund manager, Mogajane said:

The government bailout announced by President Cyril Ramaphosa in his state-of-the-nation speech last week would enable Eskom to function as a going concern for two yearsAn appropriation bill for the bailout would be approved by the end of JulyA chief restructuring officer and team have been identified, and will be announced in mid-JulyThe CRO will produce a plan to deal with Eskom's debt within 18 months; the government guarantees that investors won't suffer lossesEskom will be unbundled in two years, which will close some of the cash-flow gap. After that, the government will decide whether a further bailout is neededThe Eskom bailout is more important to South Africa than losing the country's investment-grade rating at Moody's Investors service, though he doesn't think it would lead to a downgradeEskom has more than R440bn of debt, including $5.5bn of Eurobonds, and doesn't generate enough cash to service it. About two-thirds of the debt is guaranteed by the government.

More Sierra Leone News

Access More

Sign up for Sierra Leone News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!