South Africa

South Africa’s government is considering taking over part or all of Eskom Holdings SOC. Ltd.’s 392 billion rand ($25.8 billion) debt as it seeks to restructure the cash-strapped power utility’s loan obligations, according to the International Monetary Fund, Bloomberg News reported. Eskom’s financial position is of particular concern and requires a decision on how to address its “unsustainable” debt levels, the Washington-based lender said in a statement published on its website following on-line meetings between its staff and South African officials.

South Africa’s largest lender to farmers is seeking to exit default on its debt by the end of March, potentially marking the end of a two-year saga that’s raised concern other indebted state companies will follow suit, Bloomberg News reported. The Pretoria-based Land & Agricultural Development Bank of South Africa has been struggling to find a way forward since missing a loan repayment in April 2020 that triggered a cross-default in notes issued under a 50 billion-rand ($3.2 billion) bond program.

South African Airways (SAA) said an amended business rescue (BR) plan for its low-cost subsidiary Mango was approved at a meeting of creditors on Thursday, paving the way for the airline to seek an equity partner, Reuters reported. "According to the BR practitioners the process to secure a successful bidder, inclusive of concluding the relevant acquisition agreements, is anticipated to be completed by the end of March 2022," SAA said in a statement. Business rescue is a form of bankruptcy protection in South Africa.

South Africa’s Government Employees Pension Fund, the biggest investor in Eskom Holdings SOC Ltd. debt, said there were significant hurdles to a proposal that its bonds be converted to equity to help rescue the struggling power monopoly, Bloomberg News reported. The initiative, which has been backed by the country’s biggest labor unions, was first examined by the Public Investment Corp., which manages most of the pension fund’s investments, but the GEPF has not been formally approached about a potential swap, its investment chief said.

South Africa’s Eskom Holdings SOC Ltd. resumed cutting power to customers due to breakdowns at some of its electricity-generating plans, Bloomberg News reported. The state-owned company, which is struggling to reduce its debt burden, has been cutting 2,000 megawatts from the grid since Saturday evening after breakdowns and malfunctions at six of its plants. The rolling power cuts, known locally as load-shedding, will be suspended on Monday morning and re-introduced during evenings until Tuesday night after a unit at its Koeberg plant tripped on Sunday, Eskom said in a statement.

Sub-Saharan Africa needs significant additional funding to counter damage wrought by the coronavirus pandemic, bolster its economic recovery prospects and mitigate threats posed by climate change, according to the World Bank, Bloomberg News reported. The regional economy is expected to grow 3.3% in 2021, after contracting by an estimated 2% last year, the Washington-based lender said Wednesday in its latest Africa Pulse report. It raised its gross domestic product forecast by one percentage point from its April report, largely due to better-than-expected commodity prices.

South African Airways will need a more modern fleet to be competitive on routes outside its home continent following the Covid-19 crisis, according to interim Chief Executive Officer Thomas Kgokolo, Bloomberg News reported. The state-owned airline used to generate revenue on trips to cities such as London and Frankfurt, but its aging Airbus SE planes have prohibitive operating costs, he said in a panel discussion on Wednesday. “If we get the right fleet for those particular trips we should be able to minimize costs and become competitive,” Kgokolo said.

South Africa said the private group looking to take a majority stake in the country’s dormant national airline is close to completing due diligence ahead of a planned resumption of flights later this month, Bloomberg News reported. The Takatso consortium has yet to identify any material issues that would scupper the South African Airways deal, the Department of Public Enterprises said in a presentation to lawmakers on Wednesday. The group is made up of Johannesburg-based Global Airways, which owns new domestic airline Lift, and private-equity firm Harith General Partners.

South Africa’s economy is 11% bigger than previously estimated, after statistics authorities changed the way they calculate gross domestic product, Bloomberg News reported. GDP at current prices measured 5.52 trillion rand ($369 billion) in 2020, compared with a previous estimate of 4.97 trillion rand, said Joe de Beer, deputy director-general of economic data at Statistics South Africa, told reporters Wednesday in the capital, Pretoria. The economy remains Africa’s second-biggest, lagging behind Nigeria.