JOHANNESBURG (Reuters) – South Africa’s state-run Industrial Development Corporation (IDC) said it would not consider selling its holdings in listed companies in order to take pressure off the country’s cash-strapped power utility, its chief executive told local media.
South Africa’s government has said it would dispose of “non-strategic” assets to raise much-needed money to help finance the ailing power utility Eskom[ESCJ.UL] 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 46 billion rand ($4 billion), is “out of the picture” as the company was self-funding and would require the holdings to remain financially independent.
A Barclay’s note this week said the sale of the private assets held by the IDC was 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 in Africa’s most advanced economy 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.
Even with a 20 billion rand 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.
