SA parastatals on solid footing, says minister
Eskom and Transnet are credible and reliable borrowers with strong credit fundamentals, Public Enterprises Minister Lynne Brown assured investors.
|||Cape Town - Public Enterprises Minister Lynne Brown on Thursday moved to assure investors that South Africa's parastatals were on solid footing as she responded to news that a second money manager would suspend lending to the country's state-owned companies.
“I want to assure all lenders and investors that Eskom and Transnet are credible and reliable borrowers with strong credit fundamentals as evidenced by their respective credit profiles,” Brown said in a statement. “Their performances over the past financial year confirm their strong governance structures including the stable Boards of Directors and Executive Committees.”
Brown's statement came as Bloomberg reported on Thursday that Danish Jyske Bank would block lending to Eskom, a day after Futuregrowth Asset Management's unprecedented decision to suspend additional loans and halt negotiations on over R1.8 billion of debt finance to three different state-owned companies.
Futuregrowth is a specialist investment company that manages around R170 billion of assets on behalf of Old Mutual investors. It funds Eskom, Transnet, SA National Roads Agency Limited, Landbank, Industrial Development Corporation and the Development Bank of SA.
The minister insisted the boards of both Eskom and Transnet had successfully performed their fiduciary duties, adding both state-owned companies (SOC's) attained unqualified audit reports. “This is a critical indicator for any international or national investor to invest in the future of both companies and in South Africa,” said Brown. “As the Shareholder Representative of Government in these two SOCs, I urge current and potential future investors to directly engage with me and the SOCs about any matter of concern in regard to their investments.”
In a statement on Wednesday, Futuregrowth cited conflict between branches of government and “a seeming challenge to the independence of the National Treasury” was cause for concern, an apparent reference to the friction between President Jacob Zuma and Finance Minister Pravin Gordhan, who is widely seen as not bowing to pressure from the president to sign off on costly deals involving the country's SOC's.
African News Agency