SAA, Eskom beg for cash; Africa’s ‘richest’ money scandal; SA ready for virus?

By Jackie Cameron

  • State entities SAA and Eskom are in the grip of a serious cash crunch. SAA has cancelled dozens of flights with more to come; Eskom can’t keep the lights on. After years of corruption and mismanagement, SAA is on the brink of collapse and Eskom bosses and the government are in talks with banks as they hunt for money to keep the power utility afloat. Bloomberg reports that Eskom Holdings SOC Ltd. and South Africa’s National Treasury are in talks with banks to renew a R15 billion ($1.04 billion) government-guaranteed loan facility that the indebted state power utility announced in February last year. While the lenders are reluctant to renew the facility given the parlous state of Eskom’s finances, notes the news wire, the funding is needed to help keep the company afloat, two people familiar with the discussions said. It’s unclear if the whole facility has been used. Eskom has more than R450bn of debt, isn’t generating enough income to cover its operating costs and has instituted regular power outages as insufficient spending on maintenance leads to plant breakdowns, says Bloomberg. It adds that, while the government has provided the utility with a series of bailouts, Finance Minister Tito Mboweni has said there is no scope to provide more aid. Is the government deliberately trying to sink SAA? That’s what some unionists accuse it of as the airline looks dangerously close to collapse. On Thursday South African Airways said “time is of the essence” for the government to provide a pledged cash injection if the loss-making national carrier is to continue flying.
  • Isabel dos Santos, Africa’s richest woman, is accused of corruption of the industrial scale executed by the Gupta family – and they all have political connections in Africa and are all protected by Dubai. A banker with ties to Isabel dos Santos was found dead on the same day that Angola’s prosecutor named both him and Africa’s richest woman as suspects in an investigation over alleged mismanagement at state oil company Sonangol, reports Bloomberg. Nuno Ribeiro da Cunha, 45, appeared to have hanged himself in the garage of his apartment building in Lisbon, Portuguese police said in a statement Thursday, say the news organisation’s journalists. The banker had attempted to commit suicide earlier this month, the police reportedly said. As the director of private banking at EuroBic, Ribeiro da Cunha was responsible for several multimillion-dollar transfers from a Sonangol account to a company in Dubai, according to documents released by the International Consortium of Investigative Journalists earlier this week. Lisbon-based EuroBic reportedly said in an earlier statement Thursday that Dos Santos has decided to sell her 42.5% stake in the lender. For more on the Luanda Leaks, log in to BizNews Premium.
  • As a deadly virus creates a health crisis in China, leading to at least five cities going into lock-down, markets have reacted to the negative impact on the world’s second largest economy. US stocks, says Bloomberg, slumped following losses in Europe and Asia amid growing concern that a virus spreading from China could curb global growth. Treasuries climbed and crude oil dropped, it adds. “Makes of consumer goods were among the biggest drags on the S&P 500 Index as investors tried to gauge the virus’s potential impact. Mining companies led the Stoxx Europe 600 Index lower after declines from Seoul to Sydney. China’s Shanghai Composite Index plunged 2.8% on the last trading day before the Lunar New Year holiday, the biggest drop in eight months.” The reverberations were also felt in other markets, with oil sinking to its lowest level since November on concerns the virus could dent demand, says Bloomberg, adding that government bonds and the yen rallied as investors sought a haven. Five Chinese cities have been put on lockdown and Beijing has cancelled a number of major public events in an attempt to contain the spread of a deadly coronavirus outbreak, reports the Guardian. There have been 633 confirmed cases of the coronavirus, from the same family of viruses that gave rise to Sars. Meanwhile, South Africa’s Department of Health said on Thursday port health authorities have enhanced surveillance for all travelers from Asia, especially China, following an outbreak of coronavirus in the country. Johannesburg’s international OR Tambo airport is the only port of entry for direct flights from Asia, it added, saying the measures had been put in place due to the current risk the virus could be imported to South Africa.