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#Eskom bailout emerging as an equity swap

South Africa’s biggest pot of available cash — R1.91 trillion of civil-servant pensions and unemployment funds managed by the Public Investment Corporation — is emerging as the key to rescuing Eskom.

The money manager has approached the National Treasury with a proposal to ease the R464 billion load of obligations crushing Eskom, signalling officials are gearing up for the complex financial and political operation to convert about R95 billion of Eskom debt held by the PIC into equity.

There’s still a need to undertake due diligence to confirm the viability of this proposal, the Treasury told Bloomberg. Plans to rescue Eskom have also included dipping into the surpluses of state-run unemployment and compensation funds and converting some of its mostly government-guaranteed debt into sovereign bonds.

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