South Africa: PIC Bailout of Eskom Not Yet in the Offing

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PIC board chair Reuel Khoza told eNCA that the state-owned asset manager had submitted a proposal to the GEPF to convert Eskom bonds held by the GEPF in exchange for equity in the power utility. But Khoza later clarified his comments, saying the Eskom proposal is 'purely at a conceptual stage'.

When Abel Sithole takes the helm at the Public Investment Corporation (PIC) possibly in the second half of 2020, he will have an extensive to-do list, including whether the state-owned asset manager should facilitate a bailout to debt-laden Eskom.

Sithole, who currently heads the PIC's biggest client - the Government Employees Pension Fund (GEPF) as its principal executive officer, has been fiercely opposed to throwing good money after bad to rescue Eskom.

Any bailout of Eskom, he recently told Business Maverick, should come with watertight terms and conditions including clear financial returns to the GEPF and government guarantees to money thrown to the struggling power utility. Government guarantees mean that the government - or taxpayers - will honour any outstanding payments to the GEPF if Eskom fails to pay back the money.

Sithole took a hard stance on the Eskom bailout because, as the GEPF principal...

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