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Five things making headlines in South Africa today

Eskom gets rescue proposal from PIC, Thomas Stringfellow hands himself over to police, Zuma to appear at Zondo commission on Monday and more.

Here’s what caught our attention on Friday:

1. Eskom gets rescue option from PIC

The Public Investment Corporation, which is Eskom’s biggest bondholder, has proposed to rescue the debt-laden power utility. Bloomberg is reporting that the PIC says it will convert its $6.4 billion holding in Eskom into equity in exchange for a say in Eskom’s finances and for representation on Eskom’s board. This is one of many rescue options presented to President Cyril Ramaphosa as he battles to help the power utility service its debt and ultimately keep the lights on. The PIC holds 20% of Eskom’s outstanding bonds, and if the plan is implemented, the PIC would likely obtain shares in the transmission unit (after the split) as it is being deemed as most stable, according to Bloomberg.  

Read: Eskom gets rescue option as PIC proposes debt-equity swap

Eskom unable to meet peak demand half the time

2. Thomas Stringfellow hands himself over to SAPS

In an exclusive, Moneyweb is reporting that the CEO of the Stringfellow group, Thomas Stringfellow, has handed himself over to the police after allegations emerged that he misappropriated large sums of money in client funds. According to Moneyweb, Stringfellow raised large sums of money from clients to supposedly fund his Lorna Jane business, which he ran alongside his wife Leigh. Moneyweb also found in its investigations that Stringfellow received money from a number of clients to be invested into unregulated investment portfolios. The matter is being investigated by the FSCA. 

Read: Well-known financial advisor Thomas Stringfellow arrested

3. Zuma to testify at Zondo commission

Former president Jacob Zuma will break the silence on allegations of state capture and corruption against him when he appears at the state capture inquiry on Monday, Bloomberg is reporting. Although he pleads innocence and sees the inquiry as an attack against him, Zuma is expected to answer lawyers about his business relationship with the infamous Gupta family and to answer to accusations of him benefitting from widespread looting during his nine-year tenure.

Read: SA’s must-watch TV: Zuma at bribery inquiry Monday

4. Group Five business rescue update

Construction company Group Five published on Thursday an update on its business rescue process. Business rescue practitioners say the publication of the business rescue plan has been extended to August 30, after consultation with creditors. The company also announced the resignations of four non-executive directors on June 25, after which, PwC tendered its resignation as the company’s external auditors.

5. Rand update

The rand had a positive run in the tail-end of Thursday, mostly attributed to the PIC’s proposal to rescue Eskom, which comprises it converting its holdings into equity. On the data front, manufacturing output rose less than expected, and mining production fell for the seventh consecutive month by 1.5% year-on-year in May. Investors will again be keeping a close eye on the Sarb’s interest rate decision which is due on Thursday. A majority of economists polled by Reuters foresee an interest rate cut on the back of slow economic growth. In the US, the New York Fed president also gave a green light to future rate cuts over concerns of trade, global growth and soft inflation. The rand continues its momentum on Friday, sitting at R13.90 at 9:29am.

Read: Manufacturing, mining subdued as growth burden shifts to central bank

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