PIC wants Eskom bonds turned to equity

SOUTH African state asset manager the Public Investment Corporation has submitted a proposal to the government on converting bonds it holds in struggling state utility Eskom into equity.

This was said by Public Investment Corporation (PIC) chairman Reuel Khoza yesterday.

Khoza said the PIC had discussed the proposal with its main client, the Government Employees Pension Fund, and that the two were “in principle in agreement”.

Khoza gave N$90 billion as a ballpark figure for the PIC holdings of Eskom bonds, out of Eskom's total debt of around N$450 billion. Eskom's debt is one of the main reasons why it is mired in financial crisis.

Khoza said the proposal, which was submitted to the government several weeks ago, featured a number of conditions, including that Eskom improves its operational performance and governance.

“It's still at the conceptual stage, but it's a concept that we want to believe could serve as a chopping block for thinking,” Khoza said.

The PIC is one of the largest asset managers in Africa, managing assets worth more than N$2 trillion. Its holdings include equity stakes in major companies on the Johannesburg Stock Exchange and debt issued by state companies.

– Nampa-Reuters