Photo by: Duane Daws
Government has identified the nonstrategic assets that would be sold to fund State-owned power utility Eskom.
In a reply to a Parliamentary question by opposition party Democratic Alliance MP Dr Malcolm Figg, Finance Minister Nhlanhla Nene said National Treasury had identified a range of assets, exceeding R250-billion that could be disposed of to fund the ailing parastatal.
These included directly held listed shareholdings, indirectly held listed stakes, through development finance institutions (DFIs) and unlisted shareholdings in State-owned companies (SOCs) or their subsidiaries.
Government was planning to sell about R23-billion in assets.
Treasury would also look at ringfencing and selling assets held by SOCs and the sale of other assets, such as property owned by the State.
In March, Nene said Treasury had approached about 20 financial institutions, mainly banks, to assist it with identifying which nonstrategic State-owned assets should be sold.
The allocation of a complementary package to strengthen Eskom’s financial position would be made in three tranches, with the first tranche of R10-billion taking place this month.
“The financing of the R23-billion will be deficit neutral as per the original intent. The process of raising the funds through the sale of noncore assets is firmly on track and details will only be made public at an appropriate time,” Treasury said in a statement on Wednesday night.
In addition, government signalled that it would convert the subordinated loan previously provided to Eskom to equity, which would further strengthen its balance sheet.
These interventions formed part of the government support package, which also included cost-cutting or efficiency measures to be instituted by Eskom; and appropriate tariff adjustments in line with the regulatory process.