Eskom Holdings SOC Ltd., South Africa\u2019s indebted state power utility, told investors it has asked the National Treasury to convert R16 billion of bailout funds into equity.\u00a0<\/p>\n\n\n\n
Eskom officials said on an investor call Wednesday that an application has been made to convert the subordinated loan into equity, and a decision is expected soon, according to a person on the call who asked not to be identified because the conversation was private.\u00a0<\/p>\n\n\n\n
Eskom and the Treasury didn\u2019t respond to requests for comment. <\/p>\n\n\n\n
The credit, which can be converted into equity if certain conditions are met, is part of a bigger R254 billion government bailout being extended to arrest the decline in Eskom\u2019s performance, which has caused near-daily power cuts. <\/p>\n\n\n\n
Having the government take a stake in the company would lessen a debt-service burden that\u2019s prevented Eskom from carrying out adequate maintenance.\u00a0<\/p>\n\n\n\n
In its first-half results presentation, in which the company\u00a0disclosed\u00a0that it\u2019s heading for a seventh consecutive annual loss, Eskom said it was working on converting the loan, without giving the amount or stating whether an application had been made. <\/p>\n\n\n\n
Eskom said on Wednesday it’s on course to lose R23.2 billion this year.<\/p>\n\n\n\n