Desperate Treasury eyes state asset sale
Bid to bring down debt bill and avoid further downgrades could see failing companies put on the block
The Treasury's growing desperation to avoid further descent into growth-crippling "junk" status - amid falling revenues, rising expenditure and ballooning debt obligations centred around state-owned companies such as Eskom - has forced its leading officials to consider some outright asset sales and partial privatisation of some SOEs. With about 700 state-owned companies and controlling stakes in listed entities such as Telkom - making up about 30% of the economy - the Treasury has no choice but to look at reducing the state's role and creating room for further private sector involvement. "The real issue they have is they need to bring the interest bill down ... At the moment they have no flexibility," said an insider on some of the recent discussions the department has been having over asset sales. "For them to avoid a downgrade again, they need to liquidate some of their listed holdings. But they need to manage that dialogue very sensibly. It's the only way out." South Africa's deb...
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