Category Archives: Financial, Legal & Business Services

Economists say state might dispose of its key assets to ease utility’s massive funding gap

Telkom, Broadband Infraco, Alexkor and SA Express are among the state-owned assets that could be sold to prop up Eskom, which faces a R225 billion cash crunch.

Speculation is mounting after government’s announcement on Sunday that it had found a solution for the utility’s funding gap. This included an equity injection to be funded by leveraging “nonstrategic government assets”.

Peter Attard Montalto, an emerging markets economist at investment bank Nomura, who estimated Eskom’s current funding needs at R5 billion – and R20 billion in the medium term – in Business Report this week, told City Press these were “guesstimates based on our current understanding of Eskom’s balance sheet and what sort of tariff increases might be possible, as well as Eskom’s debt to equity and debt to revenue targets it wants to hit”.

One possibility available to government is to sell off part of its holdings in telecommunications companies Telkom and Vodacom, of which it owns 39.79% and 13.91%, respectively. These are worth R11.6 billion and R26.8 billion, respectively.

“I named Telkom and Vodacom because they are listed equities and it would be easy to turn a sale around in two months,” said Attard Montalto.

But political economist Mzukisi Qobo does not see government selling its stake in Telkom, given its role in blocking an offer from South Korea’s KT Corp for 20% of Telkom.

“I seriously doubt they will dispose of Telkom,” he said. “It doesn’t make sense.”

Another possibility is Broadband Infraco, which has a 12 800km national fibre-optic network and is a provider of backhaul connectivity. Government owns 74% of the company, with the rest owned by the Industrial Development Corporation. In this year’s annual report, the corporation stated its stake in the company at R364 million, valuing government’s share at R1.4 billion.

“Broadband Infraco or Alexkor, even SA Express, could all be partly spun off, but that would require an [initial public offering] and a process that, given the state of the economy and these companies and the regulatory framework of their sectors, might well take six months,” said Attard Montalto.

“These could well be possible over the long run, but the liquidity of Telkom and Vodacom seems attractive.”

Qobo said other measures the state could look at to fund Eskom would be to issue a bond or partially float some of the state-owned companies, much like the Chinese model.

China has partially listed some of its state-owned companies such as petroleum company Sinopec, in which it holds 75.8%.

This might just be the medicine South African state-owned enterprises need,especially after the Treasury this week told Parliament’s portfolio committee on public enterprises that 40% to 50% of these enterprises were in the red.

“I think they will implode if not significantly restructured,” said Qobo.

But the rescue package for Eskom, widely expected to be fully set out in Finance Minister Nhlanhla Nene’s medium- term budget policy statement next month, might do little to avert a credit rating downgrade for the power utility.

Ratings agency Standard & Poor’s (S&P) indicated this week it needed more information on the government package after the bailout announcement – based on recommendations from an interministerial committee set up to find solutions for Eskom’s R225 billion cash crunch – to avert a credit rating downgrade to “junk” status.

Ravi Bhatia, S&P’s primary analyst on South Africa, said more details were needed before the agency could make a decision on Eskom’s CreditWatch.

“We would need details on the package – on how big the equity injection will be, as well as details on debt metrics,” he said.

Nene said on Monday that government had identified the assets it would leverage for the equity injection, but that it was “too early to disclose what they are”.

He did not say if assets would be sold, used as security, or used in other ways to raise funding.

S&P placed Eskom on CreditWatch in June, meaning there was a 50% chance of a downgrade within 90 days.

This expired yesterday.

The Eskom bonus
Government will give Eskom an equity injection by ‘leveraging’ nonstrategic government assets, and allow it to borrow R50 billion from existing guarantees.

It will also apply a raft of other nonfinancing measures, including cost savings at Eskom, refining energy policy, and supporting the utility’s application to the National Energy Regulator of SA for tariff adjustments.

Source: City Press

Standing out amongst a pile of CVs is often not easy, so how do you make a good first impression with a CV destined for the ‘yes’ pile?
 

Palesa Letaba, Talent Officer of Native VML, said: “We go through so many CVs during the job-application process and, sadly, many don’t make the grade because of amateur mistakes like poor spelling and the inclusion of irrelevant information. To assist those wanting to make an impression we’ve compiled a list of dos and don’ts for a successful CV application.”

Starting with the Dos list, Letaba says it’s important to be different. “You have to understand that HR departments see hundreds of CVs every month and if you don’t stand out you’re unlikely to be noticed. Graphs, infographics, headlines and a clean, eye-catching layout all add up to a CV that makes our hearts beat a little faster.”

Next, she suggests writing an introduction in the email. “Don’t just send a CV. If the subject line doesn’t tell us what you are interested in, it’s unlikely we can help you. If the best you can do is to send your CV with a ‘Sent from Blackberry/iPhone/whatever’ message, we will struggle to take you seriously.”

Proofread

Spellcheck and a quick proofread is an essential before hitting ‘send’, added Letaba. She advises getting a friend to read it or read it out loud to see if it makes sense.

“Let the medium be the message. What I mean by that is an application for a finance position and design position should be very different. Let your personality shine through. Don’t think of a black-and-white word document as your application. It could be anything, such as a video, blog post, singing telegram etc. Try telling a (short) story, rather than giving a list of jobs, degrees, accolades. While this is the traditional way of doing a CV you need to remember that you are applying at a creative agency, so traditional isn’t necessarily the best route. The best tip I can offer is to make sure that by the end of page three (max) we have picture of you as a person,” she said.

Letaba says that when talking about your experience, talk about your accountabilities and achievements rather than your tasks in each role you’ve had. Put your most recent experience first and make sure the dates are accurate. “If there are overlaps or gaps, tell us why. The days of a career gap counting against you are (mostly) over, but please let us know if you were hiking in Mongolia, saving the rainforests, learning to code or becoming the world Tekken champion in your downtime.”

Looking at her list of CV don’ts, Letaba says forwarded emails are a no no. “It’s really not advisable to let the company that you are hoping to work for know that it was possibly your second choice by forwarding a CV originally addressed to someone else.”

“Also applicants who call and ask: ‘When is the closing date for applications?’ don’t inspire much confidence. It sounds like you are going to wait for the last minute to apply. Apply now if you are interested.”

She adds that keeping your CV info relevant is an essential. “We don’t really care if you were the under 14B Vice Captain of your netball team.”

Inappropriate tweets

“Lastly, if you have totally inappropriate tweets on your Twitter account, don’t include your handle on your CV.”

Getting around the ‘no previous experience’ issue can be tricky when applying for any new job, but Letaba believes it can be overcome. “Tell us what you want to do. If you haven’t found yourself, pick a direction that sounds exciting and is relevant to our business and be prepared to answer questions about your choice. We won’t expect you to know everything, but we would expect a good answer to ‘Why does this appeal to you?’ Read a few articles and be able to converse, at least basically, about the subject. Tell us why we should pick you over the 300 other people who have applied for the same job.

Show us a varsity project, a piece of proactive work, an idea you have, a blog you write, something! The person who reads your application is interested in finding the very best talent to present to whoever makes the hiring decision. Give him a reason to take the next step in meeting you,” she said.

“Working in an agency is challenging but highly rewarding. Agencies are always looking for new talent, enthusiastic personalities and hard workers, so be encouraged. All the best with your applications; may the force of good grammar and articulate persuasion be with you,” she concluded.

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