Major SA lender threatens to cut billions in funding to state company: report
South Africa’s largest private fixed-income money manager, Futuregrowth, has again threatened to cut lending to a state company – this time to Umgeni Water, the City Press reports.
The lender, which is part of Old Mutual, reportedly sent a letter to water and sanitation minister Nomvula Mokonyane in the past few weeks, accusing her of destabilising the water board, and threatened to withdraw bonds it had with it.
The company accused Mokonyane of misleading the public on changes to the group’s board, after making several illegal appointments.
Speaking to the City Press, officials at the water board said Futuregrowth’s message was clear – that Mokonyane needs to get back on track, or it would take its money and leave. The minister did not comment on the story.
The Umgeni has reportedly raised over R3 billion in bonds – if withdrawn, that would put Treasury in the position of having to find another multi-billion-rand bailout.
Futuregrowth made headlines in 2016 after announcing a funding freeze to several SOEs, until it was satisfied and comfortable with the direction they were heading.
The decision came on the back of an announcement by the government that president Jacob Zuma would lead a panel to oversee all state-owned companies to ensure they help develop the country – a role previously delegated to the finance minister and other departments.
Following Futuregrowth’s call, the rand took a hit, which the company apologised for, but stood by its decision. The freeze was later lifted, following consultation with government.
You can read the full story in the City Press for 24 September
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