The Board of the Land Bank has announced the successful conclusion of a debt restructuring solution with all its lenders.
The agreement reached with the Land Bank international and local lenders will remedy the bank’s prevailing debt default which occurred in April 2020, said Land Bank Board Chairperson, Thabi Nkosi.
Nkosi said following the signing of legal agreements and the fulfilment of all conditions, the debt restructuring solution will take effect on 16 September 2024, effectively ending the Land Bank’s debt default position.
She said “scheduled repayments to lenders will occur every six months through to March 2028. The government’s equity contribution will play a critical role in this plan, positioning Land Bank on a sustainable path forward.”
Lenders including local lenders, a multilateral development finance institution and international banks, as well as the different types of debt instruments.
Enoch Godongwana, Finance Minister, said government has been concerned about the effect the protracted negotiation process has been having on the bank’s lending activities, which are vital for the socio-economic impact of the bank on the South African economy, and the agricultural sector, in particular.
He said the Land Bank contributed R45 billion to the bank’s agricultural debt finance, which represented a share of approximately 28% of the South African farming debt.
Since the debt default, the bank has repaid over 60% of its debt, equivalent to R17 billion in June 2024.
Through its own cash flow from collections and client settlements, Godongwana said the bank was able to repay 60% of its funding liabilities since the debt default.
Picture: GCIS