South Africa’s Treasury is finalising a plan to take over a portion of the utility’s debt to place the struggling electricity company on a sustainable footing, Duncan Pieterse, head of assets and liability management at the National Treasury, said in an interview Wednesday. That helped lower the company’s bond yields.
A debt transfer plan for Eskom would be a key step toward turning around the engine that drives Africa’s most industrialised nation. Years of government bailouts and rolling power outages have weighed on the economy. “It’s going to take time; it’s complicated, legally and economically,” Brown said. “You’ve got to get the amount right because you’ve got to take enough debt off their balance sheet so that they are actually sustainable, but not too much to give them a free ride and everyone has to be treated fairly.”
Source: Loan Digest (loandigest.net)