Massive blow as major lender cuts funding to Eskom, Sanral and other SOEs: report

[BusinessTech]

Massive blow as major lender cuts funding to Eskom, Sanral and other SOEs: report

Futuregrowth Asset Management, South Africa’s largest private fixed-income money manager is to stop lending money to six state companies because of governance and transparency concerns.

 

[konfab]

 

[itareanlnotani]

My guesstimate is that PICC gets "forced" into loaning them the money, or some other fund is "persuaded" to fund them..

 

[Toxic T]

Just ask the Guptas to loan you the money. :crylaugh:

 

[Mike Hoxbig]

Not a good time to be a comrade. If they're not losing control of metros, then the money is drying up at the trough.

My guesstimate is that PICC gets "forced" into loaning them the money, or some other fund is "persuaded" to fund them..

And when people's pensions are worth next to nothing, the real fun begins...

 

[itareanlnotani]

And when people's pensions are worth next to nothing, the real fun begins...

They already are, have you seen what the rands worth?

 

[Neoprod]

It's 2016...SOE's have been run like poop for a decade or more. What's changed, Futuregrowth?

 

[Hemi300c]

One of many to come if zuma continues his capture of SA finances.

 

[Albert Broco]

Can anyone please help me out here?

I have read this article about 4 times now. Yet, despite this, I fail to see 'the major blow' it refers to.

This is actually very good news.

 

[Thor]

Can anyone please help me out here?

I have read this article about 4 times now. Yet, despite this, I fail to see 'the major blow' it refers to.

This is actually very good news.

Major blow to the corrupt.

 

[TEXTILE GUY]

“It is certainly not our desire nor intent to undermine their developmental missions, nor disrupt their ability to deliver,” Canter said. “But we want to send a message that we can’t provide finance unless the governance and decision-making of the state-owned entities improves and becomes more transparent.”

Deliver what .....

 

[HavocXphere]

I fail to see 'the major blow' it refers to.

Its a vote of no confidence not just in these SoEs but also in SA's sovereign state since these SoEs are implicitly/explicitly backed by gov. At a bare minimum this'll boost lending costs that the taxpayer carries.

This is actually very good news.

Nobody benefits from this. Sure it might seem like it puts more pressure on Zoomster (and it does)...but this is not a genie you can easily stick back in the bottle later. Ask Greece...once confidence is lost its gone.

 

[ToxicBunny]

Nobody benefits from this. Sure it might seem like it puts more pressure on Zoomster (and it does)...but this is not a genie you can easily stick back in the bottle later. Ask Greece...once confidence is lost its gone.

I don't disagree but I think the source of the lack of confidence is quite limited and in a way relatively easy to turn around... Greece has bigger issues in where the lack of confidence comes from

 

[HavocXphere]

I don't disagree but I think the source of the lack of confidence is quite limited and in a way relatively easy to turn around... Greece has bigger issues in where the lack of confidence comes from

Agreed. SA is on a very different track than Greece & I wasn't aiming to imply that the same would happen. My point is more that loss of confidence tends to spiral out of control & is spectacularly dangerous....way more than a giggling prez.

As for quite limited...depends on how you look at it. From a pure numbers perspective it is. Eskom for example is cash positive and does even have any debt due soon. The bit that raised my eyebrows is someone refusing to lend even when its backed by a government guarantee. As far as I can tell all of their debt is government guaranteed. (source & source). Its unheard of for SoEs guaranteed by a stable country's sovereign backing to be denied pointblank. They're even refusing to roll existing debt.

That said there is likely also a decent dose of PR management involved here...they just don't want to be associated with the current mess.