September 08, 2019

S&P Advice to South Africa: Beware What You Say About Eskom Debt
(Bloomberg) -- Talks around restructuring Eskom Holdings SOC Ltd.’s bonds must be approached carefully to avoid spooking the market, according to S&P Global Ratings.Public Enterprises Minister Pravin Gordhan said on Thursday the government will consult with the power utility’s debt holders on any reorganization and that there isn’t any real concern about haircuts.“Whether you are talking about a haircut or a re-profiling or a restructuring, one has to tread very carefully because it could possibly lead to what is seen as a distressed-debt exchange and be called a default,” S&P’s managing director and regional manager for Africa, Konrad Reuss, said in an interview on Friday. “That would be quite unsettling for the markets.”Eskom, which supplies about 95% of South Africa’s power, has amassed 450 billion rand ($30.5 billion) of debt and turned to the government for bailouts to remain solvent as it confronts massive cost overruns at two partially completed coal-fired plants. The government has proposed splitting the utility into generation, transmission and distribution units under a state holding company -- an option rejected by labor unions that fear it will lead to privatization and job losses.“We understand various options are being discussed to deal with Eskom’s financial distress,” Reuss said while attending the World Economic Forum on Africa in Cape Town. “For us, at this point, it is wait-and-see and get more information.”‘Need Details’S&P in March changed the outlook on its CCC+ ratings of Eskom to stablefrom negative after Finance Minister Tito Mboweni announced the allocation of 69 billion rand over three years to support the company. In July, Mboweni said the government will give Eskom an extra 59 billion rand over two years.“Eskom has various kinds of debt -- domestic, foreign, government-guaranteed and unguaranteed -- which makes it highly complex.” Reuss said. “The last thing you’d want to see is that unintentionally a default is being triggered. That’s why we are all quite keen to get more details.”Eskom is regarded as the biggest risk to South Africa’s economy and the utility’s drag on growth and the nation’s finances has stoked fears that the country could lose its last remaining investment-grade credit rating with Moody’s Investors Service.Fitch Ratings Ltd. has said the extra support for Eskom will widen the budget deficit for this fiscal year to 6.3% of gross domestic product, compared with the 4.5% of GDP the government projected in February.S&P was the first major ratings company to downgrade South Africa’s debt to junk status in 2017.The National Treasury released an economic policy paper last week that proposed Eskom could sell some coal-fired power plants as part of a raft of reforms to boost the economy.“The issues in the economy and from a ratings perspective are still the same: low growth and the fiscal trajectory in terms of deficit and debt ratios is still going in the wrong direction,” Reuss said. “Whatever the economic plan is, there is urgency. We need to see implementation of measures that bring back growth and a fiscal turnaround.”To contact the reporter on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.netTo contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, Gordon Bell, Paul RichardsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Latest News
Top news around the world
Coronavirus Disease

Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus.

Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment. Older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness.

Around the World

Celebrity News

> Latest News in Media

Watch It
Chuck D Says Youth Should Run Politics from Top to Bottom | TMZ
July 02, 2020
d3jcvybSZGc
L.A. City Council Prez Herb Wesson's LAPD Reform Plan | TMZ
July 01, 2020
NEzre88T28E
D.L. Hughley Says He Spread COVID-19 to His Radio Show Team | TMZ
July 01, 2020
5Vwh5tJJ-as
Will the 'Ellen DeGeneres Show' be canceled? | Page Six Celebrity News
July 01, 2020
w6fF_hmLmw4
Candace Cameron Bure wants these ‘Full House’ quotes to live on | Page Six Celebrity News
July 02, 2020
PRF4fuEHuSM
Ex-hubby of ‘RHONJ’s’ Dina Manzo hired mobster to attack her now-husband | Page Six Celebrity News
July 01, 2020
BsAvLQrg30o
Henry Cavill on His 'Witcher' Workout Regiment, Why He's Excited for the 'Justice League' Snyder Cut
July 02, 2020
JldJ9cDzZ1o
Claire Danes & Damian Lewis - Actors on Actors - Full Conversation
July 02, 2020
HN2RlGCzJNY
'Stateless' Cast Talks Immigration, Protests, Working with Cate Blanchett
July 01, 2020
zJ0MfUCQNQ4
Jada's Affair?, Charlize Ther-Wrong Name & Housewives Hitman
July 02, 2020
ZcwG2INSVRI
Chance's Relationship Fail, $1K Haircut & Jen's Advice
July 03, 2020
mPSzAABN4yI
Twitch Streamer Byron "Reckful" Bernstein Dead at 31
July 02, 2020
RCbdlgdydME
TV Schedule
Late Night Show
Watch the latest shows of U.S. top comedians

Sports

Latest sport results, news, videos, interviews and comments
Latest Events
02
Jul
ENGLAND: Premier League
Manchester City - Liverpool
02
Jul
ENGLAND: Premier League
Sheffield United - Tottenham Hotspur
02
Jul
ITALY: Serie A
Roma - Udinese
02
Jul
SPAIN: La Liga
Real Madrid - Getafe
02
Jul
ITALY: Serie A
Atalanta - Napoli
02
Jul
SPAIN: La Liga
Real Sociedad - Espanyol
02
Jul
SPAIN: La Liga
Eibar - Osasuna
01
Jul
ITALY: Serie A
Spal - AC Milan
01
Jul
ENGLAND: Premier League
West Ham United - Chelsea
01
Jul
ENGLAND: Premier League
Arsenal - Norwich City
01
Jul
ITALY: Serie A
Inter Milan - Brescia
01
Jul
ITALY: Serie A
Lecce - Sampdoria
01
Jul
ITALY: Serie A
Verona - Parma
01
Jul
ITALY: Serie A
Fiorentina - Sassuolo
01
Jul
SPAIN: La Liga
Real Betis - Villarreal
01
Jul
SPAIN: La Liga
Real Valladolid - Levante
30
Jun
SPAIN: La Liga
Barcelona - Atletico Madrid
30
Jun
ENGLAND: Premier League
Brighton - Manchester United
30
Jun
ITALY: Serie A
Genoa - Juventus
28
Jun
ITALY: Serie A
AC Milan - Roma
28
Jun
ITALY: Serie A
Parma - Inter Milan
28
Jun
SPAIN: La Liga
Espanyol - Real Madrid
28
Jun
ITALY: Serie A
Napoli - Spal
27
Jun
SPAIN: La Liga
Atletico Madrid - Alaves
27
Jun
SPAIN: La Liga
Celta Vigo - Barcelona
26
Jun
ITALY: Serie A
Juventus - Lecce
25
Jun
ENGLAND: Premier League
Chelsea - Manchester City
25
Jun
ENGLAND: Premier League
Southampton - Arsenal
24
Jun
ENGLAND: Premier League
Manchester United - Sheffield United
24
Jun
ENGLAND: Premier League
Liverpool - Crystal Palace
24
Jun
SPAIN: La Liga
Real Madrid - Mallorca
24
Jun
ITALY: Serie A
Roma - Sampdoria
24
Jun
ITALY: Serie A
Inter Milan - Sassuolo
Find us on Instagram
at @feedimo to stay up to date with the latest.
Featured Video You Might Like
0vmRhiLHE2U JFCZUoa6MYE UfN5PCF5EUo 2PV55f3-UAg W3y9zuI_F64 -7qCxIccihU pQ9gcOoH9R8 g5MRDEXRk4k tudKp5Vhs3k iwWHibhssSo kQr0XHPbICM 5NeCb7JxaRk
Copyright © 2020 Feedimo. All Rights Reserved.