DUMA GQUBULE: Eskom bailout could buy time for debate over its future
Moving R100bn of utility debt to the sovereign balance sheet is one of two restructuring options
Finance minister Tito Mboweni could announce the biggest bailout of a state-owned company in SA history on February 20. Depending on the size of the debt restructuring and recapitalisation package for Eskom — it could be up to R200bn — the move could create some breathing room for a proper debate about the future of the ailing electricity producer. There are two ways to achieve a debt restructuring. The government could move R100bn of Eskom debt to the sovereign balance sheet, as the board and management have requested. A Nedbank report says that a R190bn bailout would set Eskom’s liquidity profile onto a sustainable path. “Using Moody’s debt-to-GDP ratio of 60% as a threshold, the government has the capacity to support Eskom to the tune of R212bn,” it reads. The easier sovereign debt-neutral option would be for the Public Investment Corporation (PIC), which has excess funding, to write off about R90bn of Eskom bonds. The second part of the package could be a R100bn recapitalisation...
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