Eskom US bond issue proves a hit
Reuters & I-Net Bridge
Johannesburg - Power utility Eskom said on Thursday that a 10-year, $1.75bn international bond launched this week was more than 2-½ times oversubscribed.
"The proceeds will be used to fund our committed capital expansion programme and so help to keep the lights on for all South Africans," CEO Brian Dames said.
Eskom has been under pressure for several years to raise money to build new power stations after a near-collapse of the grid in 2008 that hit the economy hard.
The offer follows an offshore roadshow by Eskom's executives and will be one of the largest international bond issues by a South African entity other than the state.
"The proceeds of the offering will be added to the company's general funding pool, to be applied to its committed programme of investment in new generation and transmission capacity and for general working capital," it said.
Damnes said that it was Eskom's first dollar bond issue and the pricing was "extremely attractive for us".
"It has been facilitated by the government's strong support for Eskom and we are within the cost-of-funding target set by Eskom's regulators," he said.
An application has been made for the notes to be listed on the Luxembourg Stock Exchange.
The notes are being offered to investors in international capital markets and may not be offered or sold in SA.
The successfull launching of the bond can realy be called a "shot in the dark".
for years Eskom was the benchmark in the bond industry and they used the bonds for heavy development drives. What the hell happened to their treasury department that was at one time aknowledged as the best in the World.