South African Land Bank creditors offer loan default

JOHANNESBURG – Funders of South Africa’s largest agricultural bank are offering to help the state-owned lender recover from a loan default, but first need an indication from the government on how much support it is willing to give.

The Land and Agricultural Development Bank, which provides about 30% of loans in the agricultural industry, failed to make repayments on a credit facility, triggering a cross-default event on a 50 billion-rand ($2.6-billion) bond program, the Pretoria-based lender said in a statement. It anticipates skipping payments due on Friday as well.

The state-owned Industrial Development Corp. of South Africa, which provides funding to agro-processing as well as other manufacturing industries, has said it is willing to work with the Land Bank. Futuregrowth Asset Management Ltd., which manages about 194 billion rand, including Land Bank debt, said it is also prepared to aid the cash-strapped lender.