The Public Investment Corp has submitted a proposal to government on converting bonds it holds in struggling state utility Eskom into equity, PIC chairman Reuel Khoza said in an interview.
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 R90-billion as a ballpark figure for the PIC’s holdings of Eskom bonds, out of Eskom’s total debt of around R450-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 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 R2-trillion. Its holdings include equity stakes in major companies on the JSE and debt issued by state companies. — Reported by Alexander Winning, (c) 2020 Reuters