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Eskom to build on success of bond sale

Luxembourg Stock
Exchange “’ Eskom applies
for dollar bond notes
to be listed
Johannesburg, South Africa — ESI-AFRICA.COM — 24 January 2011 – Eskom Holdings Limited “’ encouraged by the demand last week for its US$1.75 billion bond sale, the first dollar-denominated notes sold by the South African power utility “’ intends taking the success forward as it assesses future funding.

Demand for the bonds offered by Eskom, Africa’s biggest power supplier, exceeded demand more than two-and-a- half times.

“We needed to see how this would go and it’s very important that we have done it and that it’s been successful,” said CEO Brian Dames here in an interview with Bloomberg News. “We’ll take this forward in a responsible and prudent manner.”

Eskom is spending R485 billion over seven years to plug a capacity shortfall that shut mines and factories and blacked out homes in 2008. The state-owned utility supplies about 95% of South Africa’s electricity.

“Going forward they’ll definitely tap the international market again,” Deon van Zyl, head of fixed interest investment at Metropolitan Asset Managers, said from Cape Town.

In a more cautious approach also speaking from Cape Town, Investec Asset Management credit portfolio manager Simon Howie said:“The extent of the support for the first issue suggests that it’s certainly a possible avenue for funding going forward.”.

“The proceeds will be used to fund our committed capital expansion programme and so help to keep the lights on for all South Africans,” Dames said.

The offering is expected to close on Wednesday this week, and an application has been made for the senior unsecured and unguaranteed 5.75% notes to be listed on the Luxembourg Stock Exchange, Eskom revealed.