By Lehlohonolo Lehana.
State owned power utility Eskom has confirmed the acceptance of a binding offer from African Bank Limited to purchase R5.7bn staff home loan book.
Eskom on Thursday said it had concluded the negotiations on the terms of the transaction.
In December, Eskom announced that it had accepted a binding offer from African Bank for the staff home loan book and assets housed in Eskom Finance Company SOC Limited and its interest in Nqaba Finance 1 RF Limited.
Through the business, Eskom offered home loans to its employees, with instalments then deducted from their salaries.
The National Treasury required the sale of its home loan business as part of the R250 billion debt-transfer bailout delivered in 2023.
African Bank and Eskom have now reached various agreements to regulate the transaction.
The bank and energy supplier will now proceed to apply for applicable regulatory approvals from required bodies, such as the Competition Commission.
Eskom said that it will continue to keep its stakeholders updated regarding the deal.
Calib Cassim, Eskom’s Chief Financial Officer, expressed optimism regarding the deal: “Finalising the sale agreements marks a significant step in Eskom’s journey to streamline operations and focus on its core mandate.
“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, which requires the disposal of non-core assets.
“We appreciate the constructive engagement with African Bank and remain committed to ensuring a smooth transition that delivers value to our stakeholders.”
African Bank previously noted that integrating the R5.7 billion home loan book and leveraging Eskom’s established infrastructure and relationships would help diversify its offerings.
The traditional short-term lender will enter the secured home loan lending market as part of its IPO pathway, which has been delayed from 2025 to late 2027.