PIC says it is willing to convert R90 billion of Eskom's debt into equity

Hanno Labuschagne

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PIC says it is willing to convert R90 billion of Eskom's debt into equity

Africa’s biggest fund manager, the Public Investment Corp., is willing to convert more than R90 billion ($5.2 billion) of Eskom Holdings SOC Ltd. debt into equity.

The proposal has been submitted to South Africa’s National Treasury by the PIC and its main client, the Government Employees Pension Fund, Chairman Reuel Khoza said in an interview.

The PIC, which manages R2 trillion, worked on a similar proposal in 2018 and 2019, people familiar with the situation told Bloomberg in July last year. The GEPF has invested some extra cash into Eskom directly, Khoza said.

[Bloomberg]
 

flarkit

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One wonders if the PIC could then pass on any of that equity to foreign (so-called) investors.
 

Goosfrabba

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Robbing Peter to pay Paul...

At least my pension is left alone (for now at least)
 

Pegasus

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If they can convert it to equity, I guess it means they can get another few billion from PIC for their next bonds.
 

Mista_Mobsta

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Nothing out of the ordinary - would be great if the PIC had enough equity to have a say regarding who is on board of directors etc. May be a step in the right direction to remove political piggies toughs from the Eskom farm but PIC has also had its fair share of political trough-feeding!
 

Pegasus

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You will hear these words soon: "Public sector pension fund members are doing their part. It's now time for the private sector to do the same. For that reason we are introducing prescribed assets."
The Nats did it.
 

rietrot

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Equity is always better than debt as it gives more control.
 

Pegasus

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Why mention it then?
Cause it's not a new thing.

Anyway, this comes up every few years.

Didn't realist the Nats did it for 33 years.
Maybe someone can shed some light on how bad it was.
I didn't have a pension back then, so I wasn't paying attention.

 

rietrot

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Cause it's not a new thing.

Anyway, this comes up every few years.

Didn't realist the Nats did it for 33 years.
Maybe someone can shed some light on how bad it was.
I didn't have a pension back then, so I wasn't paying attention.

The Nats were fighting sanctions and capital fight. From their perspective it makes sense to try and keep money in SA to have some sort of economy. They also started most SOEs and actually build stuff. It is still not a good idea. People are better at investing their own money than government.

The ANC is looking for a new revenue stream to loot. It isn't even an investment.
 

Pegasus

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The Nats were fighting sanctions and capital fight. From their perspective it makes sense to try and keep money in SA to have some sort of economy. They also started most SOEs and actually build stuff. It is still not a good idea. People are better at investing their own money than government.

The ANC is looking for a new revenue stream to loot. It isn't even an investment.
Did it cause pension funds to lose money?
At the end of the day, that is what matters.

I remember the commercial rand / financial rand and a few other things from back then.
 

rietrot

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Did it cause pension funds to lose money?
At the end of the day, that is what matters.

I remember the commercial rand / financial rand and a few other things from back then.
I don't know were to get any stats on it. Im not going to dig for that.

It's not just about loosing money. It's the freedom to do with your money what you want.
Then it might not be the best investment even if it doesn't go negative.
Then even if you can argue it wasn't too bad under the Nats you now have the ANC.
 
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