South Africa Seeks Lesser of Two Evils With Eskom Debt Plans
- Special-purpose vehicle or sovereign may take over liabilities
- Both options would imperil South Africa’s credit ratings
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South Africa’s National Treasury is considering whether it would be better to move a chunk of Eskom Holdings SOC Ltd.’s 464 billion rand ($31 billion) of debt into a special-purpose vehicle or have the state take over responsibility for it directly, people familiar with the situation said.
While banks have led discussions for the last few weeks over the creation of a so-called SPV that would take over at least 100 billion rand of Eskom’s debt, and possibly much more, that debt would almost certainly have to be guaranteed by the government, the three people said, asking not to be identified because an announcement hasn’t been made.