<\/p>\n
South Africa will hire advisors in the coming weeks to begin negotiations with lenders on a plan to spin off state-owned power utility Eskom\u2019s transmission subsidiary,\u00a0according to the head of the National Treasury.<\/p>\n
President Cyril Ramaphosa has endorsed the creation of an independent transmission system operator, or TSO, outside Eskom as part of efforts to open the electricity market to greater private-sector participation.<\/p>\n
Read:
NTCSA fast-tracks payments to ease cash crunch for IPPs
Ramaphosa backs Eskom restructuring plan for competitive power market<\/p>\n
But carving out the utility\u2019s most profitable division has raised concerns about Eskom\u2019s long-term financial viability and the treatment of government guarantees backing its debt.<\/p>\n
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\u201cThe transaction is being carefully designed to ensure that Eskom is left no worse off, and that Eskom remains sustainable,\u201d National Treasury Director-General Duncan Pieterse said in an interview in Cape Town on Tuesday.<\/p>\n
\u201cThe TSO itself also has to be sustainable.\u201d<\/p>\n
Pieterse, who Ramaphosa this year appointed to head a team in charge of Eskom\u2019s restructuring, faces a complex balancing act in ensuring that all the company\u2019s units remain viable after the split, and that Eskom\u2019s bondholders accept the changes.<\/p>\n
\u201cThere are ways of designing this transaction to achieve all of that,\u201d he said. \u201cWe have no interest in running a process where lenders are not brought along.\u201d<\/p>\n
Read: South Africa wins Chinese backing for power-expansion plans<\/p>\n
Eskom itself this week warned that the process will have to be managed carefully as establishing the transmission operator as a separate business would entail a\u00a0material event\u00a0\u2013 a significant development that fundamentally alters the risk profile of its credit.<\/p>\n
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Pieterse declined to say whether Eskom or the government may need to secure bondholder consent for the split, saying the first step would be hiring a transaction advisor.<\/p>\n
\u201cOf course the process will be managed properly,\u201d he said.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#seeks #advisors #creditor #talks #Eskom #spinoff<\/p>\n","protected":false},"excerpt":{"rendered":"
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