GEPF would buy Eskom debt, Business Times reports

South Africa’s state pension fund would buy Eskom bonds if the government offered them to help refinance the ailing power utility, the Business Times reported.

The company can’t be allowed to fail because of the negative impact it would have on the country’s economy, the Johannesburg-based newspaper reported, citing Abel Sithole, principal executive officer at the Government Employees Pension Fund. Eskom’s total debt is R419 billion, while the GEPF says it has R1.6 trillion of assets.

“If the government came to me or the GEPF or any investor and says, ‘We will issue a bond because we need to refinance Eskom, we’ll give you a guarantee, and we’ll give you a good coupon, the duration of this bond is suitable for your liabilities,’ yes, thank you very much, we will take them,” the paper quoted Sithole as saying.

Eskom, the supplier of almost all of South Africa’s power, is being battered by declining sales, high fixed costs, surging debt and unplanned outages that are holding back economic growth. The Johannesburg-based company poses the biggest credit risk to Africa’s most industrialised nation, according to S&P Global Ratings.

L.P