Eskom offers investors up to R20bn of 10-year bonds – source

South African state-owned power utility Eskom offered investors up to $1.5 billion (R20 billion) of bonds on Thursday, a source familiar with the matter told Reuters, part of efforts by the firm’s new management to secure funding for a turnaround plan.

Eskom is struggling to emerge from a financial crisis after a series of corruption scandals under its previous management.

Books are expected to close on the bond sale on Thursday, the source said, adding that Barclays, JP Morgan, Standard Bank and Absa were named as bookrunners.

The bond will be guaranteed by the South African government and is part of Eskom’s existing $4 billion (R53 billion) bond programme.

Asked about the bond sale, Eskom spokesman Khulu Phasiwe said the firm was planning to sell foreign-currency bonds and that Chief Executive Phakamani Hadebe was currently meeting investors overseas about raising funding.

Eskom plans to raise around R72 billion ($5.35 billion) of funding for the current financial year.

The cash-strapped firm received a boost last week when it was given a $2.5 billion loan by China Development Bank during a state visit to South Africa by Chinese President Xi Jinping.

After receiving the Chinese loan last week, Eskom said it had secured more than 60% of that amount.

Last week, S&P Global Ratings assigned a ‘BB’ long-term foreign currency issue credit rating to the proposed Eskom bond issue, citing its government guarantee.