IDC to spend R6,1bn to bail out troubled firms
THE Industrial Development Corporation has set aside R6,1billion to rescue troubled local companies over the next two years.
The government-owned entity has become South Africa's main source of bail-outs in the economic crunch.
Since March last year it has helped distressed companies to the tune of R800million in the mining and beneficiation, chemicals, metals and machinery, transport and textile sectors.
In the year to March it bailed out 14 companies with R500million. Since its March year-end, it has injected a further R300million into five companies.
The figures were revealed during a presentation of the corporation's results yesterday.
Chief executive Geoffrey Qhena said interventions were focused on labour intensive industries and support for small- and medium-sized enterprises.
He refused to reveal which companies were bailed out, saying they were mainly medium-sized businesses and a few large companies.
The IDC approved funding of R10,8billion this financial year, representing an increase of 27percent over the previous year.
It has budgeted to approve investments of R11,4million in the current year - R1,5billion in the rest of Africa - and allocated R71billion for the next five years.
These investments could include projects in solar and wind power generation, bio-ethanol, a coal mine and power plant in Botswana, petrochemicals and a platinum smelter and refinery.
Qhena said just over half of the funds for the year to March were for start-ups and expansions. Another 15percent was to fund ownership changes, while restructuring and rescue accounted for 5percent of funds approved.
While the IDC said its revenue had more than doubled to R14,9billion and its profit had grown by 42percent to a record R5,6billion, its balance sheet has been affected by the economic crisis.
It had to make a fair value adjustment of R20billion on its investments, which have shrunk to R53billion.