State entities okay for now after Futuregrowth move, says Fitch’s BMI Research
FUTUREGROWTH’s decision to suspend loans to state-owned enterprises will probably not put their 2016-17 funding plans at risk, says BMI Research, a Fitch Group subsidiary.Futuregrowth, which is Africa’s biggest private fixed-income money manager, recently said it would stop lending to Eskom, rail and ports operator Transnet, the South African National Roads Agency (Sanral), the Land Bank, the Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA), citing their governance among its concerns.Another lender, Denmark’s Jyske Bank, followed suit.BMI Research based its assessment of Eskom's financing risks on the fact that Eskom has reported it has already secured more than half its borrowing requirement for the financial year, while for Transnet, Futuregrowth accounted for just 1.25% of its borrowings.Despite this, BMI Research said Futuregrowth and Jyske Bank’s decisions to suspend lending was concerning because it revealed "the extent to which busin...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.