State firms request bailouts over Covid-19
South African State companies have requested billions of rand in funding from the government to help them weather the impact of the coronavirus crisis, a finance ministry presentation to parliament showed on Tuesday.
Loss-making State companies have long been an Achilles heel for Africa's most industrialised economy, requiring bailouts that have placed its public finances under huge strain at a time of weak economic growth and helped push its sovereign credit rating to "junk" status.
The South African Post Office had requested R4.9-billion in support, broadcaster SABC was seeking R1.5-billion and airports company ACSA had applied for an equity injection of R3.5-billion because of the impact of Covid-19, according to the presentation by National Treasury officials.
Ailing power utility Eskom's financial performance was worse than budgeted for as a result of limited economic activity during the pandemic, and arms firm Denel faced the risk of entering bankruptcy protection or being liquidated, it added.
The companies did not immediately respond to a Reuters request for comment.
Denel, which makes military equipment for South Africa's armed forces and clients around the world, told Reuters last week that it was not planning to seek new government equity injections despite a liquidity crunch aggravated by the pandemic.
It is unclear how much funding will be issued to the State firms. South Africa's economy is forecast to contract at least 7% this year because of the coronavirus crisis and its budget deficit could balloon to as much as 16% of GDP in the current fiscal year.
One bright spot was agricultural lender Land Bank. It had resumed interest payments to lenders from Aug 11, the presentation showed, after defaulting earlier this year and being promised a bailout in a June budget.
Comments
Projects
Latest News
Showroom
FlameBlock is a proudly South African company that engineers, manufactures and supplies fire intumescent and retardant products to the fire...
VISIT SHOWROOM
Weir is a global leader in mining technology. We recognise that our planet’s future depends on the transition to renewable energy, and that...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
