{"id":328703,"date":"2019-07-11T16:07:00","date_gmt":"2019-07-11T14:07:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=328703"},"modified":"2019-07-11T16:07:00","modified_gmt":"2019-07-11T14:07:00","slug":"rand-strengthens-on-reports-of-new-eskom-rescue-plan","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/328703\/rand-strengthens-on-reports-of-new-eskom-rescue-plan\/","title":{"rendered":"Rand strengthens on reports of new Eskom rescue plan"},"content":{"rendered":"

The rand rose to the strongest level since February after Eskom biggest bondholder was said to have a rescue plan for the state-owned company.<\/p>\n

The currency, which was already being buoyed by a global rally, added as much as 0.9%, bringing the dollar-rand pair close to crossing below its 200-week moving average.<\/p>\n

The nation\u2019s 2026 bonds rallied, putting the yield on course to closing below 8% for the first time in more than a year.<\/p>\n

The Public Investment Corp. wants to convert its $6.4 billion holding into equity in return for a say over Eskom\u2019s management, including board representation, said five people with direct knowledge of the talks.<\/p>\n

\u201cA debt-equity swap means that a creditor becomes a shareholder, and if the amount of debt swapped is large enough, even potentially a controlling shareholder. In my lingo, that is tantamount to privatisation, albeit in stealth mode,\u201d said Cristian Maggio, the head of emerging-market strategy at TD Securities in London.<\/p>\n

\u201cPersonally, I don\u2019t think it\u2019s going to happen unless the government accepts that privatisation is needed. It would be a very welcome development, but it ain\u2019t gonna happen.\u201d<\/p>\n

\"\"<\/a><\/p>\n

A plan for the struggling utility would be a relief for government bonds and the rand, which have been weighed down by concerns over the impact of bailouts on the nation\u2019s finances.<\/p>\n

The potential proposal coincides with a rally in emerging markets, which advanced on bets the U.S. will cut borrowing costs this month for the first time in more than 10 years.<\/p>\n

The rand added 0.9% as of 14h29 in Johannesburg to R13.86 per dollar. The main stock gauge was little changed.<\/p>\n

Eskom, which supplies about 95% of the electricity used in Africa\u2019s most industrialised economy and has been labeled \u201ctoo big to fail\u201d by President Cyril Ramaphosa, has more than R440 billion ($32 billion) of debt, and doesn\u2019t generate enough cash to service it.<\/p>\n

The National Treasury is finalising a bailout plan over and above the R68 billion pledged in the February budget.<\/p>\n

\n

Read: Rate cut expected next week<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The rand rose to the strongest level since February after Eskom biggest bondholder was said to have a rescue plan for the state-owned company.<\/p>\n","protected":false},"author":59,"featured_media":114834,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-328703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/328703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=328703"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/328703\/revisions"}],"predecessor-version":[{"id":328711,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/328703\/revisions\/328711"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/114834"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=328703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=328703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=328703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}