(Bloomberg) — Eskom Holdings SOC Ltd. wants the majority of its 440 billion rand ($29 billion) of debt transferred to the South African government.
The struggling state power utility said it can only sustain 160 billion rand of debt, company executives told investors on a no-deal road show in London on Wednesday, said Ksenia Mishankina, a senior credit analyst at Union Bancaire Privee Ubp SA in London.
Eskom wants the government to transfer the debt it has guaranteed onto its own balance sheet. At the end of the fiscal year in March, Eskom had utilized 295 billion rand of the guarantees offered by the government, according to the National Treasury.
The utility is hoping for resolutions to some of its problems and progress on a plan to split into three units after the National Treasury’s mid-term budget in October, the executives said, according to Mishankina. They also want the government to provide a resolution to the issue of unpaid debt from some of its municipal customers.
The 160 billion rand figure is derived from an assessment that it can sustain debt of five times earnings before interest, tax, depreciation and amortization.
–With assistance from Oliver Telling and Paul Burkhardt.
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