South Africa Misses Deadline to Name Asset Sales for Eskom

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South Africa’s National Treasury delayed the announcement of assets to be sold to finance a bailout for power utility Eskom Holdings SOC Ltd.

Finance Minister Nhlanhla Nene had pledged to allocate 23 billion rand ($1.9 billion) to Eskom, with the first of three installments to be paid by the end of June. Eskom, which is rationing power as it struggles to meet demand, has a cashflow shortfall of 225 billion rand for the five years through 2018.

“All is progressing well, but sometimes there are unanticipated delays,” Treasury spokeswoman Phumza Macanda said by phone on Tuesday. “We will be announcing details on the assets to be sold in the course of this week.”

The government is in talks to sell part or all of its stake in mobile-phone company Vodacom Group Ltd. to the Public Investment Corp., the state pension fund manager, to raise funds for the bailout, people familiar with the plans said earlier this month. The state’s 13.9 percent stake in Vodacom is currently valued at 28.7 billion rand.

Nene hasn’t disclosed any details of the assets to be sold, except to say it would be non-core. Lawmakers passed a bill last week enabling the National Treasury to make a 23 billion-rand allocation to Eskom and approved legislation to convert a 60 billion-rand subordinated state loan, which was granted to the utility in 2008, into equity.

“We are at an advanced stage and it’s just a matter of tying things up,” Macanda said.

On Monday, the energy regulator rejected Eskom’s request to almost double the approved increase in tariffs this year. The utility had sought to raise the funds to buy electricity and diesel to help ease a shortage that’s led to scheduled blackouts. Eskom has struggled to finance new generating capacity and is battling to meet demand after delays in building new power stations and as aging plants suffer from breakdowns.

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