South Africa

Debt and corruption scandals at Eskom Holdings SOC Ltd. make the utility the biggest risk to South Africa’s economy and the government needs to replace its management, Goldman Sachs Group Inc. said. Eskom plans to raise almost 340 billion rand ($26 billion) in the next five years, while meeting 413 billion rand of interest and debt repayments, which amount to 8 percent of South Africa’s gross domestic product, Bloomberg News reported.

Fairfax Financial Holdings Ltd. is prepared to inject as much as 5 billion rand ($386 million) to pay off bank debt owed by AfriSam Group Pty Ltd. and help South Africa’s second-biggest cement producer clinch a tie-up with larger rival PPC Ltd., according to two people familiar with the matter. The money from the African unit of the Canadian insurer will be used to repay bank loans and allow AfriSam to push through a new offer to PPC, according to the people, who asked not to be identified because the details are private, Bloomberg News reported.

The Gupta business family at the centre of a political scandal in South Africa has sold its main mining company to a little-known Swiss-based group — the second sale of a prime asset this week, the Financial Times reported. Oakbay, the Guptas’ holding company, said it had agreed to sell Tegeta Exploration and Resources to Charles King for R2.97bn ($225m).

South Africa’s National Treasury confirmed the appointment of Vodacom Group Ltd. executive Vuyani Jarana as the first permanent chief executive officer of the state-owned carrier since November 2015. Jarana will take the helm at South African Airways when Vodacom releases him of his duties, the Treasury said in an emailed statement on Thursday. The debt-laden airline has failed to make a profit since 2011 and was handed a bailout last month after National Treasury transferred funds to help it avoid a default on its debt to Standard Chartered Plc, Bloomberg News reported.

South Africa is evaluating assets it could sell to pay for this month’s 2.2 billion rand ($169.5 million) bailout of unprofitable carrier South African Airways, Finance Minister Malusi Gigaba said in letter to parliament, Bloomberg News reported. The government’s decision to settle a debt owed by the airline to Standard Chartered Plc mustn’t affect the balance of this year’s budget, Gigaba said in the note to Baleka Mbete, speaker of the National Assembly. Further details will be provided in October, he said.

South Africa will extend more support to the beleaguered state-owned power utility and is considering selling assets as part of a 14-point plan to revive an economy that’s in its second recession in almost a decade, Bloomberg News reported. The country will approach the energy regulator this month about the “hardship” Eskom Holdings SOC Ltd. is dealing with, and will develop a case for “soft support” of the electricity producer until its new tariffs are finalized next year, Finance Minister Malusi Gigaba told reporters in Johannesburg Thursday.

Ratings agency Fitch is likely to follow rival Standard & Poor’s and cut South Africa’s sovereign credit rating to below investment-grade, analysts said, an outcome that would underscore worries about political uncertainty and prompt a further sell-off in assets, the Irish Times reported. The ratings agency was considering its position as thousands of South Africans took to the streets on Friday to urge President Jacob Zuma to step down after a turbulent week in the wake of his firing of respected finance minister Pravin Gordhan.

Pravin Gordhan, South Africa’s finance minister, has slashed the country’s growth forecast in half and warned that political turmoil threatens to derail an economic turnround as he battles to stave off a downgrade to junk status, the Financial Times reported. In a budget delivered days before he is due to appear in court on fraud charges, Mr Gordhan said South Africa was “at a crossroad, politically and economically” in defending and reforming public institutions.

South African Airways, the national carrier, probably incurred a loss for a fifth consecutive year in the past financial period, and would be insolvent without a government-backed guarantee, Bloomberg News reported. The state airline’s loss for the year ending March is estimated at 1.8 billion rand ($124 million), and follows a 4.7 billion loss a year earlier, Finance Minister Pravin Gordhan said in parliament on Tuesday. Gordhan approved a further 4.7 billion rand going-concern guarantee last week that will allow the company to release delayed financial statements on Sept. 15.

South African Airways, the national carrier, probably incurred a loss for a fifth consecutive year in the past financial period, and would be insolvent without a government-backed guarantee, Bloomberg News reported. The state airline’s loss for the year ending March is estimated at 1.8 billion rand ($124 million), and follows a 4.7 billion loss a year earlier, Finance Minister Pravin Gordhan said in parliament on Tuesday. Gordhan approved a further 4.7 billion rand going-concern guarantee last week that will allow the company to release delayed financial statements on Sept. 15.