London – South Africa would consider selling stakes in publicly traded companies, including those held indirectly through Industrial Development Corporation, to bolster the finances of power utility Eskom.
The government said last week in its mid-term budget it would provide Eskom with 20 billion rand through the sale of non-strategic assets.
Many of those, including a stake in Sasol, the world’s biggest maker of motor fuel from coal, are held via state-owned IDC.
Finance Minister Nhlanhla Nene said the form in which the shares were owned would make no difference to the government’s ability to raise cash.
“If it’s held by government, it’s held by government,” he said in an interview at a conference in London yesterday.
“There are areas where the government shouldn’t be invested. It’s those areas that we are looking at.”
Eskom, which supplies 95 percent of South Africa’s power, is struggling to meet demand in the continent’s second-biggest economy as parts of its aging fleet of 27 plants fail, even as they undergo maintenance, leading to blackouts.
The utility has to plug a 225 billion-rand cash flow shortfall for the five years through March 2018.
Data on Sasol’s website shows IDC owns 8.2 percent.
That’s worth 29 billion rand, according to Bloomberg calculations.
Sasol’s shares traded 0.2 percent higher at 551.17 rand by 10:19 am in Johannesburg.
IDC owns almost 13 percent of Anglo American unit Kumba Iron Ore for 11 billion rand, according to data compiled by Bloomberg.
Its 7.9 percent stake in ArcelorMittal South Africa is valued at 1.2 billion rand.
IDC spokesman Mandla Mpangase couldn’t immediately comment when reached by phone and said he would respond to written questions later today.
While unlisted entities such as freight group Transnet and Eskom will remain state-owned, because they are vital to the country’s plans to develop its infrastructure, shares in mobile-phone company Vodacom “and those sorts of things are a different ball game,” Rob Davies, the minister of trade and industry, said in a separate interview at the same conference.