Land Bank makes another loss, debt plan not yet finalised

24th August 2021 By: Reuters

South Africa's Land Bank made another loss in the year to the end of March and is yet to finalise a debt restructuring plan, the bank said on Tuesday.

The state-owned agricultural bank, which defaulted on its debt in April 2020 and missed a restructuring deadline in March 2021, is one of a handful of loss-making state firms that are placing huge strains on the country's stretched public finances.

Separately, state arms manufacturer Denel told a different parliamentary committee it had made a net loss of more than R360-million in the financial year that started in April, and it owed more than R630-million to its employees and R900-million to suppliers.

Land Bank lost roughly R1.1-billion in the 2020/21 financial year, it disclosed in a presentation to a parliamentary committee, versus a R1.3-billion loss the previous year.

The bank said it had sent draft term sheets and commitment agreements to its lenders, but negotiations were still ongoing.

Land Bank received a 3 billion rand government bailout last year and was allocated a further 7 billion rand in this year's February budget.

By March it had made a capital repayment of approximately R4.2-billion to lenders, and it plans to make another R3-billion payment by September.

Denel makes military equipment including missiles and ammunition for South Africa's armed forces and export customers but has faced a liquidity crisis.

It added that its latest projections for the 2021/22 financial year indicated negative cashflow of R600-million if no mitigation action was taken.

The company is in talks with the government about another bailout, as it aims to become profitable under a new business model within the next five years.