Is Eskom paving a way for an internal deal with the PIC?
23 July 2020
The Democratic Alliance (DA) notes that Eskom has put out a comprehensive Request for Proposals (RFP) for Treasury and Financial Services.
The RFP covers almost every aspect of services aimed at understanding and restoring the viability and financial stability of the entity – from Advisory Services, Balance Sheet Optimisation, Cost and Debt Analysis, Expected Future Exposure through almost every letter of the alphabet – ending in Valuations, Xerus/Xpac Models and Zeta Models. (See here and here)
The problem is however that (a) much of this has been done before – repeatedly and at huge cost, (b) the delivery of this falls squarely in the lap of its highly remunerated Treasury Unit and, (c) all these efforts aimed at wooing investors to make Debt for Equity Swaps will amount to nothing as no international bond investor will touch it with a barge pole.
This then may well amount to a costly exercise to pave the way for an internal deal with the Public Investment Corporation (PIC). Towards the end of May this year, the PIC submitted a proposal to government on converting bonds it holds in struggling state utility into equity.