President rejects Eskom proposal

DEAL SUGGESTS STATE MUST PAY R100BN Power utility reportedly considering selling smaller assets to improve liquidity.

President Cyril Ramaphosa signalled he doesn’t back a proposal from struggling stateowned power utility Eskom for the government to assume a large portion of its debt.

There are a number of options being considered to solve Eskom’s large debt burden, he said in an interview with radio station 702 on Thursday.

Eskom has told bond investors it wants the government to take on about R100 billion of its debt.

“The debt swap that Eskom has come up with is just going to descend us into further deeper debt as a country,” Ramaphosa said. “So we have said we need to look at a number of other options.”

Ramaphosa said he would announce a task team to consider solutions. The team will look at Eskom’s current challenges after the company was forced to implement rolling blackouts, as well as its business and funding models.

Ramaphosa’s comments come as Eskom considers the sale of smaller assets to improve its liquidity, people familiar with the matter have said.

It is believed it is in advanced talks to sell its home loans business, with local billionaire Patrice Motsepe’s African Rainbow Capital Investments in line to take some or all of the operation.

The president was to announce a special presidential council on state-owned enterprises.

He said the government would help the South African Broadcasting Corporation address its own funding squeeze.

Constraints to growth, including providing policy certainty, and making it easier to secure visas, will be addressed.

Investment in new infrastructure will be a key driver of growth.

Corruption in some state companies had reached a “horrifying” level, he said.

Those responsible will be jailed once due process has run its course.

No decision has been taken on an ideal size of the Cabinet.

The ANC is addressing its internal divisions, renewing itself and will win a bigger share of the vote than it did in 2014.