Land Bank in talks with lenders to restructure its debt, Parly told

The bank is a significant player in the agricultural sector with a market share of 29% of the country’s agricultural debt.

FILE: Parliament of South Africa in Cape Town. Picture: EWN.

CAPE TOWN - The Land Bank is in talks with a consortium of lenders aimed at restructuring its debt, Parliament has been told on Wednesday.

The bank is a significant player in the agricultural sector with a market share of 29% of the country’s agricultural debt.

But it is in a liquidity crunch and defaulted on repaying R50 billion of loans in April.

The Land Bank and National Treasury are appearing before a virtual meeting of Parliament’s Standing Committee on Appropriations.

Land Bank chairperson Mabotha Arthur Moloto commented on the crisis that has befallen the Land Bank: “In a nutshell, chairperson, one could almost liken it to a run on the bank, where your major clients are withdrawing all their facilities from you – and that causes a major crisis for any bank. We are at this stage engaging with a consortium of all lenders, which is composed of commercial banks, and institutional investors – the negotiations are at a very sensitive stage.”

Moloto said the Land Bank had liabilities of R45 billion, almost 45% of which was short term funding.

“So, we are at this stage engaging with them (the lenders) with a view to restructuring the debt facilities, finding ways of lengthening the term. I need to emphasise that we have got every intention to honour our obligations and service the interest on those debts.”

Moloto said due to the nature of the talks under way, he could not share with the committee certain information as it was market sensitive.