IDC rules out asset sale to rescue Eskom

IDC rules out asset sale to rescue Eskom

2015-01-15 09:51

Johannesburg - The  Industrial Development Corporation (IDC) said it would not consider selling its holdings in listed companies in order to take pressure off cash-strapped power utility Eskom, its chief executive told local media.

The government has said it would dispose of "non-strategic" assets to raise much-needed money to help finance the ailing power utility Eskom and help end frequent electricity outages.

Speaking to the Business Day newspaper, Geoffrey Qhena said the complete disposal of IDC stakes, which amount to about R46bn, is "out of the picture" as the company is self-funding and would require the holdings to remain financially independent.

“We’ve got a specific mandate and selling assets would not help us fulfil it,” spokesperson Mandla Mpangase said by phone, confirming Qhena's comments. “We have not been approached by government to sell any assets.”

Selling IDC assets would have “a negative bearing on our funding activities,” Mpangase said. “We have our own initiatives to help Eskom, such as our R1bn investment in building solar power.”

A Barclay's note this week said the sale of the private assets held by the IDC is the fastest and most likely way to provide funds to state-owned Eskom.

South Africa is currently facing its worst power crisis since 2008, as Eskom struggles to keep the lights on due to ageing and poorly maintained power stations.

The utility last Friday implemented rolling blackouts in some parts of the country, the first such power cuts this year, and has warned that more are certain as the company has no funds to purchase fuel for its gas turbine stations.

The government will provide the utility with R20bn through the sale of non-strategic assets, it said in its October 22 mid-term budget.

Finance Minister Nhlanhla Nene said later that month that disposals could include stakes in publicly traded companies, either directly owned by the government or held by the IDC. The development company has holdings in Sasol, the world’s biggest maker of motor fuel from coal, Kumba Iron Ore and papermaker Sappi, among others.

The government is exploring a sale of its R27bn stake in mobile phone company Vodacom, people with knowledge of the matter said last year. The state also owns about 40% of landline phone monopoly Telkom.

Even with a R20bn cash injection from the government and permission to raise electricity tariffs, Eskom has said it needs more funds to ensure liquidity.

IDC has stakes in companies such as Kumba Iron Ore, Sasol, BHP Billiton, Hulamin and Sappi.

  • Heywood Ublowme - 2015-01-15 09:57

    Just watch how quickly those state coffers are going to be looted by JZ and co when the proceeds from the sale of state assets are received....

      Yob Vas - 2015-01-15 10:01

      of course the ANC isn't going to sell it's cash cow to fund a black hole, it would rather shift that burden onto their other cash cows [us tax payers] shoulders.

      Lynda Tyrer - 2015-01-15 10:13

      Yob taxpayers are broke already

      Linds Ron-House - 2015-01-15 10:36

      Reminds me of one Coleman Andrews who sold the fleet at SAA and reported a 'profit' while SAA was in fact making a loss. He left the country with a handsome R230 million golden handshake, which made the golden handshake (R11 million) given to Khaya Ngqula laughable.

      Nic Bischoff - 2015-01-15 10:45

      'which made the golden handshake (R11 million) given to Khaya Ngqula laughable.' Nothing to laugh at, cry maybe.

      Linds Ron-House - 2015-01-15 11:05

      @Nic, It's a figure of speech, to emphasize the fact that R11 million is insignificant when compared to R230 million - less than 5%.

  • Made Inthe South - 2015-01-15 10:03

    R46bn.That is the value the IDC has.To put it into perspective,the Russian nuclear reactors will cost R1 trillion plus,that is R1 Billion multiply a 1000 times

      Lynda Tyrer - 2015-01-15 10:12

      Maybe the penny will drop nuclear contracts are out...but now wonder what any cancellation will cost seeing I am sure many palms have already been greased.

  • Heresmy Finger - 2015-01-15 10:04

    How about the Government deregulates Eskom?

      Malcolm MacLeod - 2015-01-15 10:55

      Deregulate eskom and force them to immediately sell half their plants. This will bring in new investor cash and give eskom themselves money to work with. Within a year or two we would never hear about blackouts again - almost all problems in this country are the result of government protected/owned monopolies and reglations.

  • Bradley Duncan - 2015-01-15 10:12

    In other words they're not interested in doing whatever it takes to sort the problem out. They would rather see it collapse than do what HAS to be done. Idiots.

  • Bretton Eveleigh - 2015-01-15 10:13

    Start a program and cut all illegal connections! Then loadshedding will not be needed and the economy won't crash... but no... the ANC knows it'll lose way too many votes... that's exactly why they aren't forcing municipalities in arrears with Eskom to cough up... because it's political suicide for Zuma... typical ANC looks after ANC... Zuma looks after Zuma... and f*ck the rest of us that make South Africa's economy work!

  • Louie Walshe - 2015-01-15 10:20

    In other words our electricity supply is about to run out. And civil war in 10, 9, 8, 7....

  • Adriaan Jooste - 2015-01-15 10:29

    Another good story to tell...hey JZ ? Maybe time to own up, resign and admit that you cant't run a country on an Informal standard 5 qualification!

  • John Stoltz - 2015-01-15 10:33

    It will not be sold off, although it is an incompetent utility which make juicy jobs for similar incompetent cadres at the taxpayers expense!! A typical ANC modus operandi!! Sell it off and the ANC will have R-billlions to loot, while privaye sector with competent staff will keep the lights on at no extra costs to the taxpayers!!

  • Natalie Dickerson Gelonese - 2015-01-15 10:35

    Start with Firing the CEO who costs over 20M a year. Then get Zuma and Malema to pay back for the home and taxes respectively, that should help a bit.... The taxpayers cant carry these people anymore.

  • Lekker Befock - 2015-01-15 10:39

    And absolutely no comment from the ANC supporters. They must be in agreement with all the cooments so far!

  • Lekker Befock - 2015-01-15 10:40


  • Joe Irwin - 2015-01-15 10:50

    Aging power stations will operate efficiently when they are well maintained. There are hundreds of them throughout the world, producing what is required for the people who pay for them. Deferred and reactive maintenance simply cannot work and now any planned maintenance cannot be done, because there is no spare capacity in place to allow it.

  • Maryke Scheepers - 2015-01-15 10:50

    Do you want to find the money needed, go back and look at the huge bonusess, oh and I know of the once thatour dear Zumpies visited Eskom and the gardens and offices were upgraded at astronomical amounts! Lunch: pap, sous and braaivleis at R280.00 per person! Now if that's not wasting!

  • James Peck - 2015-01-15 11:00

    Everything is now starting to pinch. but it will be shifted to the tax payer no doubt. The end of the line is coming up faster and faster and options will run out Another African failure in the south of good countries that it once was If you could not get ahead with a good start and prosper you will never because you cant Your ideology is in the way and your greed has also been a stumbling block. Wake up cause your legacy does not look good man

  • Barry Jones - 2015-01-15 11:15

    No need to sell anything to sort out financial problems. Easiest way out....lower the salaries of of the fat cats at the top!

  • Nathi Dlomo - 2015-01-15 15:37

    The IDC must stand its ground and not sell any assets.

  • Mariah Prudy Mahlangu - 2015-01-15 17:13

    If Eskom has been allowed to be run by professionals as it was even in the Apartheid Days, this would never have happened. When is Government going to learn to stop this catastrophic BEE and Affirmative Action policies that they try to implement everywhere?

  • pages:
  • 1