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Government may need to save indebted state firms, Mboweni says

As SOEs struggle to refinance their debts.
Finance Minister Tito Mboweni. Image: Bloomberg

South Africa’s cash-strapped state companies may struggle to refinance their debts, requiring the government to provide support, Finance Minister Tito Mboweni said.

The ten most-indebted state firms have an estimated R289.9 billion in loans maturing by the end of March 2025, Mboweni said in a written reply to a parliamentary question. Those include power utility Eskom, which has 401 billion rand in liabilities and has already received several bail-outs.

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“The credit risk of most state-owned entities is unfavourable due to their strained financial positions,” which makes it difficult for them to raise funds, and the advent of the coronavirus has exacerbated the problem, Mboweni said. “These factors, if they persist, may result in state-owned entities being unable to refinance debt successfully, which may require the sovereign to provide the necessary support to them.”

In the long-term, the government intends reforming the companies to make them sustainable, including disposing of some of their non-core assets, merging some of them and adopting alternative financing models, according to the minister.

All the nation’s obligations will be met, and the short-term and foreign debt risk levels are below that of similarly rated peer countries and within its risk benchmarks, Mboweni said.

© 2021 Bloomberg

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Yaaaaa!!

In this country stubbornness and defiance is seen as bravery. On and on we go.

The anc has set this country back for centuries. SA’s will pay forever for voting for these crooks.

You left out stupidity and corruption.

“R289.9 billion in loans maturing…”

Borrow from the R500 billion Zupta donated to the Gupta.

Also the headline is misleading and should be

“Tax payers may need to save indebted government firms, again and again and again.”

Ex-friggin-actly! The politicians will never, ever admit that each and every cent that gub’ment has in its claws actually originated from that much maligned group known as TAXPAYERS

What about the bleeding, crippled, burnt out Tax payer?

Why must we pay Tax for bad investments? Why does no one guarantee our jobs?

Coming soon: Taxpayers vs. Parasites – The Final Accounting.

End of comments.

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