Minister Brown assures investors on Eskom, Transnet
Public Enterprises Minister Lynne Brown on Friday responded to recent decisions by Futuregrowth Asset Management and Denmark's Jyske Bank to cut off cash flows to Eskom and Transnet.
Brown said in a statement that she wants to assure all lenders and investors that Eskom and Transnet are credible and reliable borrowers with strong credit fundamentals 'as evidenced by their respective credit profiles'.
Futuregrowth has taken a decision to suspend additional loans to Eskom, Transnet, Sanral, Landbank, the Industrial Development Corporation (IDC) and the Development Bank of South Africa (DBSA).
According to the company, the decision is driven by growing concerns about the governance and decision structures of the SOEs and will remain in place pending a review.
Jyske Bank followed suit, reportedly saying it was concerned about governance at the power utility.
Brown said Eskom and Transnet's performances over the past financial year confirmed their strong governance structures, including the stable Boards of Directors and Executive Committees.
"I, as Shareholder Representative on behalf of Government, have recently concluded Eskom and Transnet's Annual General Meetings. The Boards have fulfilled successfully their performed fiduciary duties and both companies had unqualified audit reports. This is a critical indicator for any international or national investor to invest in the future of both companies and in South Africa," Brown said.
Brown urged current and potential future investors to directly engage with her and the SOEs about any matter of concern in regard to their investments.