government will next month lay out plans to take on a majority of the debt owed by the beleaguered Eskom have lifted the company’s bonds, providing some relief to investors facing a long and uncertain wait.
“The more debt the government is willing to take on, the better for Eskom, because it will help to reduce its interest costs, which is one of the big problems,” said Max Wolman, senior portfolio manager at Abrdn, which holds the bonds. While Godongwana said a transfer would happen in phases to keep South Africa’s debt-to-GDP levels stable, he did not provide details.
“There is likely to be little in terms of action on the back of this announcement,” said Alexander Rozhetskin at Citi. “We expect that Eskom will need to meet certain criteria before it can offload some of its debt on to the sovereign.”
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