A second money manager has taken the decision to no longer lend to South African power utility, Eskom, with more lenders expected to follow.<\/p>\n
Denmark’s Jyske Bank told Bloomberg<\/a><\/strong> that it has also ‘pulled the plug’ on Eskom, citing concerns over governance.<\/p>\n “We pulled the plug on Eskom too yesterday,\u201d the group told Bloomberg.<\/p>\n “(We) could easily see more lenders follow suit. We see issues on lending going forward and more governance issues.\u201d<\/p>\n On Wednesday,\u00a0Futuregrowth Asset Management\u00a0\u2013\u00a0South Africa\u2019s largest private fixed-income money manager\u00a0\u2013 said it would stop lending money to six state companies (including Eskom) because of governance and transparency concerns.<\/p>\n \u201cWe\u2019ve observed recent reports that strongly hint of conflict between branches of South Africa\u2019s government, the possible machinations of patronage networks and a seeming challenge to the National Treasury\u2019s independence,\u201d the group told Bloomberg.<\/p>\n \u201cAny material risk to the state-owned entities\u2019 governance, budgeting and approval processes for spending or lending must impact on our forward-looking credit assessments. It is difficult to make reasoned and defensible decisions to continue providing state-owned companies with additional funding using clients\u2019 money.\u201d<\/p>\n The company said it has\u00a0suspended negotiations on over R1.8 billion debt finance to three different SOEs.<\/p>\n Futuregrowth manages over R170 billion worth of assets, while Jyske manages around R19 billion in assets.<\/p>\n Massive blow as major lender cuts funding to Eskom, Sanral and other SOEs: report<\/a><\/strong><\/p>\n 5 things the ANC wants you to know about Zuma, the Guptas and Gordhan<\/strong><\/a><\/p>\nMore on South Africa<\/h3>\n