Creditors of South Africa\u2019s largest lender to farmers are offering to come to the table and help the Land and Agricultural Development Bank recover from a loan default.<\/p>\n
The Land Bank, which provides about 30% of loans in the agricultural industry, failed to make repayments on a credit facility, triggering a cross-default event on a R50 billion bond program, the Pretoria-based lender said in a statement. It anticipates skipping payments falling due on Friday as well.<\/p>\n
The state-owned Industrial Development Corp. of South Africa, which provides funding to agro-processing as well as other manufacturing industries, will continue to work with the Land Bank and \u201cother financial-services providers,\u201d the institution said in an email on Thursday.<\/p>\n
\u201cIDC has a long-standing relationship with Land Bank as a development finance institution and we operate along the same value chain.\u201d<\/p>\n
This comes after Futuregrowth Asset Management Ltd., which manages about R194 billion, including Land Bank debt, said it was willing to work with the lender to resolve its liquidity position.<\/p>\n
Sorting out the lender\u2019s problems requires \u201ccoordinated, speedy and constructive engagement among all stakeholders,\u201d it said Thursday.<\/p>\n
The nation\u2019s largest farmers\u2019 group has appealed to President Cyril Ramaphosa\u2019s government to step in and bailout the lender to avoid a surge in borrowing costs and a\u00a0threat\u00a0to food security.<\/p>\n
While the National Treasury said it is considering support for the Land Bank, this would have to be met with structural changes to the company\u2019s balance sheet.<\/p>\n
The government\u2019s finances have been left in tatters by years of mismanagement and corruption that have crippled state companies.<\/p>\n
Finance Minister Tito Mboweni is still to announce how a R500 billion support package aimed at reigniting growth and supporting those worst affected by the coronavirus lockdown will be carved up.<\/p>\n
The measures include 200 billion rand\u2019s worth of guarantees for banks to encourage them to lend.<\/p>\n