South African state companies have asked for billions of rand in government funding to help them through the coronavirus crisis, a finance ministry presentation to parliament on Tuesday showed, Reuters reported. Loss-making state firms have been a long-term drain on Africa’s most industrialised economy, requiring bailouts that have strained public finances at a time of weak economic growth, helping to tip its sovereign credit to a “junk” rating.
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South African state defence firm Denel is not planning to seek new government equity injections despite a liquidity crunch aggravated by the coronavirus crisis, its interim chief executive told Reuters on Thursday, Reuters reported. Denel, which makes military equipment for South Africa’s armed forces and clients around the world, is one of several troubled state-owned companies in the country that have been kept afloat by government bailouts in recent years. It has struggled to pay salaries this year amid export restrictions and declining revenue.
Standard Chartered is suing South Africa’s Land Bank to recover debts, Land Bank said on Tuesday, after the state-owned agricultural lender defaulted on repayments for debt worth 50 billion rand (2.26 billion pounds) in April, Reuters reported. South Africa’s Treasury said in June it would inject 3 billion rand into The Land and Agricultural Bank of South Africa, the country’s largest agricultural focused-lender, which had been in talks with creditors on a restructuring plan following the default.
South African mobile operator Cell C said on Friday it expects to close around 128 stores across the country, more than half of its retail footprint, with 546 jobs on the line as it seeks to cut costs and restructure its operations, Reuters reported. The job cuts will be in addition to Cell C’s plans to lay off 960 workers, announced in June. “The retail environment has changed and this has been fast-tracked by the impact of COVID-19 and the evolving purchasing habits of consumers,” Cell C, which is not listed and is 45% owned by Blue Label Telecoms, said in a statement.
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.
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.
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.
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.