National Treasury says the Land Bank failed to meet its deadline of the end of March to conclude its debt restructuring plan with lenders. This has been revealed in Treasury’s June quarterly report that has now been submitted to Parliament.
The report gives a reflection of the contingent liability exposure of government.
Treasury says the bank has been unable to meet its commitments due to financial challenges.
Treasury says the slow pace by the Land Bank to reach a resolution as well as the increased complexity and uncertainty on the liability solution, gives an indications that the entity does not have sufficient cash to service its debts.
The report further states that the Land Bank’s funding challenges could intensify due to various factors. These factors include its financial loss of R2.8 billion incurred in the 2019/20 financial year, the disclaimed audit opinion from the Auditor-General and a reduction in investor confidence.
Treasury says as a result of all these challenges, it is highly likely that government will have to provide the Land Bank with additional funds to service its guaranteed debt.
