The turnaround at Transnet — close to insolvency last year — has been so rapid that it can finance a R40,8-billion infrastructure investment programme entirely off its own balance sheet, says Public Enterprises Minister Alec Erwin.
Erwin told Parliament last Friday that a government-coordinated financing strategy for parastatals is no longer needed. With stronger balance sheets, they could coordinate their own investment programmes.
“[Chief executive] Maria Ramos has made quicker progress than expected at Transnet,” Erwin said. The company is due to publish financial results next month after recording losses totalling R6,3-billion last September.
Eskom, expected to spend at least R70-billion on new and refurbished power stations, could also raise the necessary capital without swamping debt markets or hurting its bond rating, Erwin said. Some of the cash will come from a new round of asset sales, as parastatals shed non-core businesses — most loss-making.
However, it is not clear whether the R2,5-billion former public enterprises minister Jeff Radebe said would be raised from the sale of shares in MTN held through Transnet are included in these figures.
The proceeds of the sale, Radebe said last year, would cut the deficit in Trans-net’s second defined benefit pension fund by more than half, to R2-billion.
Radebe then moved to the transport ministry. None of the 80-million shares has been transferred, and no money has changed hands.
“We are ready to move, and we believe we have fulfilled all the criteria,” Sandile Zungu, who led the Umthunzi consortium that bought the shares, said. “We don’t know what the reason for the delay is.”
MTN shares have appreciated by 40% over the past year, but Zungu said this had been anticipated in the structure and financing arrangements of the deal.
The department said it did not comment on deals that were still being negotiated, and Transnet said it was in a closed period ahead of its results presentation. But it is understood the government is uncomfortable with aspects of the deal, and is delaying its implementation as it seeks an acceptable solution.