Investors balk at Cyril Ramaphosa’s Eskom bailout plan
Additional front-loaded support will mean an increase in sovereign-bond issuance, and pose a risk to SA’s debt path, says Citadel portfolio manager Mike van der Westhuizen
President Cyril Ramaphosa’s latest pledge to support Eskom is good news for the cash-strapped electricity company — but some investors are balking at the prospect of increased sovereign-bond issuance to pay for the bailout.
Ramaphosa told MPs last week SA would bring forward part of the R230bn earmarked for Eskom over the next 10 years. The Treasury has not budgeted for additional support over and above the R23bn allocated in February for this and each of the next two years...