Eskom said to mull asset sales as billionaire Motsepe circles

Eskom is considering the sale of smaller assets as the state-owned power utility weighs solutions to a liquidity crisis that contributed to a wave of rolling blackouts, according to people familiar with the matter.

The supplier of almost all South Africa’s power is in advanced talks to sell its home-loans business, with local billionaire Patrice Motsepe’s African Rainbow Capital Investments in line to take some or all of the operation, said the sources, who asked not to be identified as the plans are still private.

The division, called Eskom Finance, has an R8.7bn ($613 million) loan book and about 16 000 customers.

Eskom didn’t respond to an emailed request for comment. African Rainbow Capital declined to comment.

Eskom is seeking funding after the company resumed scheduled power cuts in late November, following a hiatus of more than three years. The Johannesburg-based utility is struggling to stay on top of maintenance costs and the servicing of a debt pile of about R419bn, while coping with the aftermath of a string of corruption scandals during the presidency of Jacob Zuma, who was ousted earlier this year.

The utility wants the National Treasury to absorb R100 billion of its debt as part of a rescue plan, according to a fund manager. However, Finance Minister Tito Mboweni has said that the company should instead go to the bond market to raise cash. Eskom should also consider selling its two large new coal-fired power stations to help repair its finances, FirstRand Chief Executive Officer Alan Pullinger said in an interview last week.

For Motsepe, the purchase of Eskom’s home loans division would help develop his financial-services business. The entrepreneur, who made the bulk of his $2.1 billion fortune from mining, is planning to start a digital-only bank, known as Tyme, by the end of the first quarter of 2019.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
15.74
-0.6%
Rand - Pound
19.80
-0.9%
Rand - Euro
16.81
+0.0%
Rand - Aus dollar
11.16
-0.2%
Rand - Yen
0.12
-0.1%
Gold
1,853.82
-0.7%
Silver
22.00
-0.5%
Palladium
2,010.00
+0.1%
Platinum
949.00
-0.8%
Brent Crude
113.56
+0.1%
Top 40
61,176
0.0%
All Share
67,585
-0.2%
Resource 10
74,448
+0.1%
Industrial 25
72,681
+1.3%
Financial 15
15,434
-2.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot