South Africa

Hopes of a trade truce between China and the U.S. and a more dovish Federal Reserve are giving South Africa’s rand a boost -- and President Cyril Ramaphosa some breathing space as he struggles to stabilize the state-owned electricity company while curbing government debt levels, Bloomberg News reported. Given the outlook for South Africa’s economy -- sluggish growth, a widening fiscal deficit, and the threat of a credit-rating downgrade to junk -- the rand shouldn’t be a popular investment.

EOH Holdings Ltd. Chief Executive Officer Stephen Van Coller is in a race against the clock to restructure the sprawling South African IT business before shareholders and lenders run out of patience, Bloomberg News reported. Van Coller, a former executive at Barclays Africa Group Ltd. and MTN Group Ltd., was brought in to turn around the troubled business and improve its corporate reputation after allegations of corruption linked to government contracts.

South African retailer Steinhoff International Holdings N.V. said on Thursday it had received a petition by a group of shareholders looking for an inquiry into the company before a Dutch court, the latest addition to its growing troubles, Reuters reported. The company has been in the middle of a clean-up of its balance sheet after discovering multi-billion euro holes in its balance sheet more than a year ago. One of Steinhoff’s creditors has also challenged the company’s plan to restructure its convertible debt into new secured loans.

South Africa’s state-owned power utility may need as much as 230 billion rand ($16.5 billion) of financial assistance over the next decade, Finance Minister Tito Mboweni said, Bloomberg News reported. Eskom Holdings SOC Ltd. needs immediate help and it can’t await restructuring of its business, Mboweni told lawmakers in Cape Town Thursday. “It is 150 billion rand amortized and that makes it 230 billion rand, or 23 billion rand a year,” National Treasury Director-General Dondo Mogajane said.

South Africa will bail out state utility Eskom with 69 billion rand ($4.9 billion) over three years, the centrepiece of a budget that exposed the limited room President Cyril Ramaphosa has to fix the economy ahead of an election in May, Reuters reported. Ramaphosa, who is fighting rifts within his own party before the parliamentary election, has made reforming Eskom one of his top priorities as its 420 billion rand debt pile poses a direct threat to Africa’s most developed economy.

Deutsche Bank AG plans to start rebuilding its South African workforce just months after scaling back staff and cutting costs as part of a global restructuring, Bloomberg News reported. “The hiring we’re currently pursuing is geared toward enhancing the areas where we have global and local strengths, such as fixed income,” South Africa Chief Executive Officer Muneer Ismail said in an interview on Tuesday.

South Africa’s AngloGold Ashanti said on Tuesday it was putting its interests in an Argentine mine up for sale as it looks to focus on operations with a longer shelf life and ability to deliver higher returns, Reuters reported. AngloGold Chief Executive Kelvin Dushnisky, Barrick Gold’s former president, was appointed to head the firm last year and has rolled out plans to streamline its portfolio, set a 15 percent hurdle on returns on investment and cut debt leverage targets to a ratio of 1.0 times net debt to adjusted Earnings before interest, tax, depreciation and amortization.

South African Finance Minister Tito Mboweni is looking for a way to keep the country’s main power producer from sucking the life out of the economy, Bloomberg News reported. Debt at Eskom Holdings SOC Ltd. has ballooned to 419 billion ($31 billion) and it’s struggling to supply Africa’s most-industrialized nation with enough power even as it weighs on finances, with most of its borrowings guaranteed by the state. The Department of Public Enterprises says the utility needs a cash injection to survive.

South African President Cyril Ramaphosa reached out to labor unions that oppose his plans to break up the state power utility, reassuring them that the move is aimed at rescuing the embattled company rather than preparing it for privatization and mass firings, Bloomberg News reported. Eskom Holdings SOC Ltd. has amassed 419 billion rand ($29.6 billion) of debt following years of mismanagement, isn’t producing enough power to meet demand or cover its costs and has had to institute rolling blackouts for the past five days.

South African power utility Eskom needs a cash injection by April to survive, the country’s public enterprises ministry warned in a presentation on Wednesday, although it later changed its wording to say the firm was “facing liquidity challenges,” Reuters reported. State-owned Eskom, which supplies more than 90 percent of the power in Africa’s most industrialised economy, cut electricity for a fourth straight day on Wednesday.