Eskom mulls asset sales as Patrice Motsepe circles
Eskom, desperately in need of cash, is in advanced talks to sell its home-loans business, possibly to African Rainbow Capital
Eskom is considering the sale of smaller assets as it weighs solutions to a liquidity crisis that contributed to a wave of rolling blackouts, according to people familiar with the matter.
The supplier of almost all SA’s power is in advanced talks to sell its home-loans business, with local billionaire Patrice Motsepe’s African Rainbow Capital (ARC) in line to take some or all of the operation, said the people, who asked not to be identified as the plans are still private.
The division, called Eskom Finance Corporation, has an R8.7bn loan book and about 16,000 customers.
Eskom didn’t respond to an e-mailed request for comment. ARC declined to comment.
Eskom is seeking funding after the company resumed scheduled load-shedding in late November, following a hiatus of more than three years. The utility is struggling to stay on top of maintenance costs and the servicing of a debt pile of about R419bn, while coping with the aftermath of a string of corruption scandals during the presidency of Jacob Zuma.
Eskom chair Jabu Mabuza told Business Day last week that it will ask the National Treasury to absorb R100bn of its debt as part of package of measures to turn the troubled company around.
However, finance minister Tito Mboweni has said that the company should, instead, go to the bond market to raise cash. Eskom should also consider selling its two large, new coal-fired power stations to help repair its finances, FirstRand CEO Alan Pullinger said in an interview last week.
For Motsepe, the purchase of Eskom’s home-loans division will help develop his financial services business. The entrepreneur, who made the bulk of his $2.1bn fortune from mining, is planning to start a digital-only bank, known as Tyme, by the end of the first quarter of 2019.
Bloomberg, with Staff Writer