Non-core SOE assets set to be sold
THE GOVERNMENT has committed itself that it will finalise plans to sell non-core assets in state-owned entities (SOEs) by early next year in order to raise capital and dispose of them.
However, it has not said what assets would be sold, except to say it was busy with the process.
Finance Minister Malusi Gigaba said recently that they were busy identifying non-core assets they would sell to the private sector.
Chief economist at Efficient Group Dawie Roodt said yesterday that he was not optimistic about the process and whether the private sector would buy these assets.
He said most of the assets in state entities were non-core assets and the government would try to sell worthless assets.
“The big question is, will the private sector buy the duds. The private sector will buy the duds if they will make money,” he said.
Two years ago the government sold its stake at Vodacom and got R23 billion, which it gave to Eskom.
This was at the time the power utility needed the cash.
The government also converted its R60bn loan to Eskom, taking the financial injection to the power to R83bn.
Gigaba told Parliament recently they were looking at selling some of the non-core assets to raise the R13bn the national carrier needs.
However, Gigaba said this was not unique to SAA as they were looking at non-core assets for sale across SOEs.
He would not say which noncore assets had been identified or would be sold once the government had agreed on the sale.
Gigaba said this process began a while ago and would be completed in March next year.
It is expected that Gigaba in his budget speech in February next year will talk about some of the assets that will be considered for sale and how much the government was expecting to raise from them.
SOEs have been shrouded in state capture allegations and poor governance.
The government has been pushing them to maintain a strong balance sheet and stop relying on bailouts.
The state has given the SOEs guarantees of more than R467bn in the last few years with SAA, Eskom and Transnet getting a portion of the loan guarantees.
The issue of the guarantees has also come into focus in recent times with calls for the government urged to stop giving guarantees because of allegations of corruption and poor governance.
This week t ee on public enterprises will begin its inquiry into state capture. However, the witnesses are expected to be called at the end of the month to give evidence into allegations of corruption at Eskom.
The state’s stake in Vodacom raised R23 billion when sold two years ago, which was given to Eskom.
Eskom’s logo at Koeberg nuclear power plant. Eskom has been a recipient of state fund guarantees in the past.