[ad_1]
SOEs have requested billions of rand in government funding to help them cope with the impact of the coronavirus crisis, a presentation by the Finance Ministry to parliament showed on Tuesday.
Losing SOEs have long been an Achilles heel for the South African economy, requiring bailouts that have put its public finances under heavy pressure at a time of weak economic growth and have helped bring its sovereign credit rating to the state of “garbage”.
The South African post office had requested R4.9 billion in support, broadcaster SABC was seeking R1.5 billion, and airport company Acsa had requested a capital injection of R3.5 billion due to the impact of Covid. -19, according to the presentation of the officials of the National Treasury.
Electric power company Eskom’s financial performance was worse than budgeted as a result of limited economic activity during the pandemic, and arms firm Denel faced the risk of going into bankruptcy protection or being liquidated, it added.
The companies did not immediately respond to a request for comment.
Denel, which makes military equipment for South Africa’s armed forces and its customers around the world, said last week that it did not plan to seek further injections of capital from the government despite the liquidity crisis exacerbated by the pandemic.
Economic contraction
It is unclear how much funds will be given to state companies. South Africa’s economy is forecast to contract by at least 7% this year due to the coronavirus crisis and its budget deficit could rise to 16% of GDP in the current fiscal year.
One positive was the Land Bank, an agricultural lender. He had resumed interest payments to lenders as of Aug. 11, the filing showed, after defaulting earlier this year and was promised a bailout in a June budget. – Reported by Alexander Winning, (c) 2020 Reuters
