Africa

South Africa’s government has started talks with private entities interested in buying into the country’s insolvent national carrier, which needs at least 10 billion rand ($583 million) to resume operations, Bloomberg News reported. A team from the Department of Public Enterprises and advisers from FirstRand Ltd.’s Rand Merchant Bank began negotiations after receiving as many as four promising proposals regarding South African Airways, according to Kgathatso Tlhakudi, the DPE’s director general.

South Africa’s state defence firm Denel made a 1.7 billion rand ($99 million) loss in the 2019/20 financial year, the ministry that oversees the company said on Wednesday, Reuters reported. Denel, which makes equipment from armoured vehicles to missiles for the South African armed forces and clients around the world, is suffering a liquidity crisis aggravated by the COVID-19 pandemic. It has struggled to pay salaries and has yet to publish its results for the financial year ended in March.

Kenya’s second-biggest bank said loans issued via mobile phones almost halved in the first six months of the year, indicating that the fallout from the coronavirus pandemic is hitting lower-income earners hardest, Bloomberg News reported. Monthly disbursements by KCB Group Plc averaged 4 billion shillings ($36.9 million) to 5 billion shillings, down from 7 billion shillings to 8 billion shillings before the outbreak, and defaults have more than tripled, according to Chief Executive Officer Joshua Oigara. Many of the bank’s mobile loan customers are from the informal sector.

South Africa’s Rand Merchant Bank, the investment banking arm of FirstRand Ltd., has been appointed as an adviser to help the government assess offers for stakes in its insolvent national airline, according to two people familiar with the situation, Bloomberg News reported. The state is looking to raise more than 10 billion rand ($575 million) that South African Airways administrators say is needed to revive its operations eight months after going into bankruptcy protection.

The planned business rescue of South African Airways is in limbo because government attempts to raise 5.3 billion rand ($307 million) of immediate funding from commercial banks failed to elicit a response, a person familiar with the situation said, Bloomberg News reported. The administrators of the state-owned airline can’t hand over the business to management because it is insolvent, the person said.

There is no recovery in sight yet for Africa’s worst-performing stock market as investors look to bank earnings this month to assess how hard the coronavirus pandemic hit Kenyan lenders, Bloomberg News reported. Net foreign-investor outflows and reduced dollar earnings led the Nairobi Securities Exchange 20 Share Index to slide for seven consecutive months through July, falling to the lowest in 17 years, according to data compiled by Bloomberg.

The administrators of South African Airways, the state-owned airline that’s in bankruptcy protection, want the government to set aside 16.4 billion rand ($998 million) that it’s guaranteed to pay creditors, Bloomberg News reported. The Treasury says the current structure of its guarantees should suffice.

Zambia was once a model in Wall Street’s rush to issue debt for the world’s poorest nations, attracting bigger orders and lower interest rates than some more-developed countries. Less than a decade later, the Southern African nation is straining to pay back more than $11 billion in loans, The Wall Street Journal reported. The world is gearing up for a battle over developing-country debt like few it has seen before.

Eskom Holdings SOC Ltd. agreed to release some funds to a municipality in South Africa’s Free State province to help it cover running costs, after seizing its bank accounts earlier this week, Bloomberg News reported. The Maluti-a-Phofung Local Municipality owes 5.3 billion rand ($318 million) in unpaid electricity bills and must reach an agreement to service the debt and its current account by Aug. 7, Eskom said in a statement Saturday.

All conditions for a rescue plan for South African Airways (SAA) have been met, apart from a guarantee letter lenders need from the government, the state-owned airline’s administrators said on Thursday, Reuters reported. The administrators will ask creditors at a meeting on Friday for the letter, stating that state guarantees will remain in force until the lenders’ claims are paid out in full, to be agreed by July 27, later than a previous deadline.