Eskom Finalizes Sale Agreements with African Bank for Finance Company Disposal

2025-07-10

Eskom Signs Sale Agreements with African Bank for Finance Company Disposal

Eskom has signed formal sale agreements with African Bank Limited for the disposal of Eskom Finance Company (EFC), marking a significant milestone in the utility's asset divestment strategy, the power provider announced today.

The transaction, which was first announced in December 2024, includes the sale of EFC's staff home loan portfolio, related assets, and Eskom's stake in Nqaba Finance 1 (RF) Limited.

Progress on Key Transaction Requirements

According to Eskom's statement, the signing of these agreements satisfies a critical condition for the transaction to proceed, alongside several other preliminary requirements that have now been met.

The next step involves both parties submitting the necessary documentation to the Competition Commission for regulatory approval, which remains one of the final hurdles before the transaction can be completed.

Alignment with Debt Relief Conditions

Eskom's Chief Financial Officer, Calib Cassim, emphasized that this transaction fulfills one of the requirements set by National Treasury under the government's debt relief programme, which mandates the disposal of non-core assets.

"Finalising the sale agreements marks a significant step in Eskom's journey to streamline operations and focus on its core mandate," Cassim stated. "This transaction not only supports our strategic goals but also fulfils one of the conditions set by the National Treasury under the debt relief programme."

Background on the Transaction

The original announcement of this disposal was made via a Stock Exchange News Service (SENS) notice on December 5, 2024, when Eskom accepted African Bank's binding offer for the acquisition.

Eskom Finance Company primarily manages the utility's staff home loan scheme and has historically operated as a subsidiary that falls outside Eskom's core electricity generation, transmission, and distribution business.

Outlook

While this transaction represents progress in Eskom's efforts to comply with debt relief conditions and refocus on its core operations, several steps remain before completion. The Competition Commission approval process typically takes several months, suggesting the final transfer may not occur until late 2025.

The disposal appears to be part of Eskom's broader strategy to improve its financial position following years of operational challenges and the ongoing implementation of its unbundling process. Notably, this transaction does not directly impact the utility's operational capacity or loadshedding status, which remains suspended since March 2024.

Eskom has indicated it will continue to provide updates as the transaction progresses through the remaining regulatory requirements.

Key Terms Explained

• Eskom Finance Company (EFC): A subsidiary of Eskom that manages the staff home loan portfolio and related financial services for Eskom employees.
• Nqaba Finance 1 (RF) Limited: A special purpose vehicle related to Eskom's financing operations.
• SENS (Stock Exchange News Service): The news dissemination service of the Johannesburg Stock Exchange where listed companies must publish material information.
• Debt Relief Programme: The R254 billion government support package announced in 2023 to address Eskom's financial challenges, which comes with specific conditions including the disposal of non-core assets.
• Competition Commission: The regulatory body responsible for investigating, controlling, and evaluating restrictive business practices and mergers in South Africa.