Banks, Investor Push to Solve $32 Billion Eskom Debt Crisis

Nedbank Group Ltd. is leading discussions to restructure South African power utility Eskom Holdings SOC Ltd.’s 464 billion ($32 billion) debt load, Bloomberg News reported. The parties met in recent days, and one of the options is to transfer at least 100 billion rand of debt to a special-purpose vehicle that would be overseen by the Public Investment Corp., Africa’s biggest fund manager. “Eskom intends to work constructively with all its creditors to develop a plan that will improve the company’s balance sheet while adequately catering for the requirements of its lenders and other stakeholders,” the utility said. “The utility is in regular discussions with its stakeholders to agree on the best solution to shape the balance sheet as the company moves to the next phase of its strategy.” Eskom, described by Goldman Sachs Group Inc. as the biggest threat to the South African economy, has become mired in debt as a result of overspending on projects. The utility can’t meet its costs and is subjecting the country to intermittent power outages as a result of inadequate maintenance at its aging fleet of coal-fired power plants. Eskom risk premium narrows as investors buy into South Africa's rescue plan The yield premium of Eskom’s 2028 dollar bonds over comparable government debt narrowed on Friday to the least in 17 months, suggesting bondholders are gaining confidence in a rescue plan. Read more.