South Africa

South Africa’s banking industry would be able to withstand a default by Eskom Holdings SOC Ltd. but the impact on pension funds is a concern for the central bank, Governor Lesetja Kganyago said. The power utility is laden with about $35 billion of debt, roughly equally divided into bonds and loans, according to data compiled by Bloomberg from public records, and is struggling to meet demand for electricity from aging and unreliable plants, Bloomberg News reported.

Steinhoff International Holdings NV’s legal woes deepened as a Frankfurt court received 10 suits to be included in a mass German investor case against the embattled global retailer, Bloomberg News reported. That’s on top of 6.2 billion euros ($6.9 billion) of claims highlighted by Steinhoff in its annual report earlier this month. The owner of Conforama in France and Mattress Firm in the U.S. has called for potential claimants to come forward, seemingly opening the door for negotiated settlements with those who lost money from the company’s late 2017 share-price crash.

Yields on Eskom Holdings SOC Ltd.’s dollar bonds traded near one-year lows while those on government debt jumped amid renewed speculation that the South African government may take over the cash-strapped electricity company’s debt, Bloomberg News reported. Moody’s Investors Service now includes the power producer’s government-guaranteed debt in its assessment of the nation’s fiscal situation because the utility can’t service its obligations without the state’s backing, it said in an emailed report Wednesday.

South Africa’s Public Investment Corp., whose 30% stake in Lonmin Plc is enough to block the miner’s planned takeover by Sibanye Gold Ltd., is concerned that the value of the all-share deal has been eroded, according to a person familiar with the matter, Bloomberg News reported. The state-owned PIC is troubled by the drop in Sibanye’s stock since the deal was announced in December 2017 as the company battled to cut debt, said the person, who asked not to be identified as the deliberations are private.

Steinhoff International Holdings NV is living on the edge. The global retailer at the center of South Africa’s biggest corporate scandal cut the value of its assets by 15.3 billion euros ($17 billion) because of accounting irregularities, Bloomberg News reported. The company also warned it won’t be able to keep going longer than 12 months unless its debt is reorganized and it skirts mounting lawsuits and possible regulatory fines. At risk is a business with 120,000 employees across chains including Mattress Firm in the U.S., Conforama in France, Poundland in the U.K.

South Africa’s government has had to bring forward the bailout of state power firm Eskom, after it rushed 5 billion rand ($355 million) to the struggling utility earlier this month to avert a default and said more cash could be needed soon, Reuters reported. Eskom supplies more than 90 percent of electricity in Africa’s most advanced economy but is grappling with cashflow problems and a debt mountain which it is struggling to service.

South African builder Group Five said on Friday it would dispose of some assets and delay its interim results after filing for bankruptcy protection last month. The group, one of the biggest names in South Africa’s construction industry, said the disposals would help it meet its debt obligations, cover working capital and cut its liabilities, Reuters reported. In a stock exchange statement, it said its business review had delayed the release of its interim results, which had been due at the end of March.

South African President Cyril Ramaphosa’s plan to split the state-owned power utility into generation, distribution and transmission divisions will take longer than the government has to revive the business, according to Goldman Sachs Group Inc, Bloomberg News reported. Eskom Holdings SOC Ltd. is focusing on trying to avoid implementing power cuts through the year, as it attempts to fix aging power plants and defective new units. Ramaphosa has rolled out a 69 billion-rand ($5 billion) bailout for Eskom over the next three years and a plan to split the business into three.

Steinhoff International Holdings NV pushed back the dates for the publication of audited earnings for 2017 and 2018 after the findings of a forensic probe by PwC made the process more time consuming and complex, Bloomberg News reported. The South African retailer, which almost collapsed amid an accounting scandal in late 2017, is working toward ensuring that all appropriate adjustments are made to valuations and profitability at various subsidiaries, the company said in a statement on Friday. That has slowed down the process considerably.

Finance Minister Tito Mboweni urged the South African National Roads Agency SOC Ltd. to reverse a decision not to chase down people who aren’t paying electronic tolls to fund a freeway upgrade around Johannesburg and Pretoria. The state-owned company known as Sanral has faced resistance to e-tolls from motorists since their inception in 2013 and hasn’t issued public debt in at least three years following a drop in revenue caused by the boycott, Bloomberg News reported.