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Eskom is said to mull asset sales as billionaire circles

Patrice Motsepe in line to buy power utility’s home-loans business.

Eskom is considering the sale of smaller assets as the South African state-owned power utility weighs solutions to a liquidity crisis that contributed to a wave of rolling blackouts, according to people familiar with the matter.

The supplier of almost all South Africa’s power is in advanced talks to sell its home-loans business, with local billionaire Patrice Motsepe’s African Rainbow Capital Investments in line to take some or all of the operation, said the people, who asked not to be identified as the plans are still private. The division, called Eskom Finance, has an R8.7 billion loan book and about 16 000 customers.

“The process is ongoing and no preferred buyer has been identified at this stage,” an Eskom spokesperson said in an emailed respond to questions. African Rainbow Capital declined to comment.

Eskom is seeking funding after the company resumed scheduled power cuts in late November, following a hiatus of more than three years. The Johannesburg-based utility is struggling to stay on top of maintenance costs and the servicing of a debt pile of about R419 billion, while coping with the aftermath of a string of corruption scandals during the presidency of Jacob Zuma, who was ousted earlier this year.

The utility wants the National Treasury to absorb R100 billion of its debt as part of a rescue plan, according to a fund manager. However, finance minister Tito Mboweni has said that the company should instead go to the bond market to raise cash. Eskom should also consider selling its two large new coal-fired power stations to help repair its finances, FirstRand chief executive officer Alan Pullinger said in an interview last week.

For Motsepe, the purchase of Eskom’s home loans division would help develop his financial-services business. The entrepreneur, who made the bulk of his $2.1 billion fortune from mining, is planning to start a digital-only bank, known as Tyme, by the end of the first quarter of 2019.

© 2018 Bloomberg L.P

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So on top of everything Escom loaned R8.7billion to 16 000 of its employees to buy houses.

Yep..and most loans excede the value of property…

That’s not true, average LTV is 73%

Ya, first it was Guptas everywhere, ow lately it is just Motsepe Motsepe everywhere, same story just new actors……..I can’t believe these people

Oh there’s Eskom finance, I wonder how healthy is their book – given the fact that they can’t manage anything

Book is a disaster…other major banks have had a look and walked away…actually a personal loan setup rather than home loan

such a cosy set up, Cyril’s brother in law gets first bite

I don’t think the housing thing will be run as a profitable busines – given Eskom’s track record – so maybe a bitter mouth full, lol.

The home loan story at Eskom is hilarious, we have well and truly been milked for decades.

The 2023 State Capture inquiry will be,as they say, “lit”.

We are simply following the Russian route-assets to mates! Hopefully they willl find it difficult to take proceeds offshore when it comes to KYC and source of funds.

When 70% of the debtors on that book get retrenched, the loans business will fail. Probably getting quotes on insurance now.

Eskom are such good employers it wouldn’t surprise me if the home loans are interest free!

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