Eskom Holdings SOC Ltd., which depends on government support to service its R368 billion ($27 billion) of debt, is evaluating a so-called liability management exercise as it seeks to implement a turnaround plan, said the people, who asked not to be identified because the matter is private. Management have discussed seeking to recover unpaid bills and increase tariffs to boost revenues by about 50 percent in four years and lay off about 15,000 workers, the people said.

Representatives for the company declined to comment on the debt extension proposal and said any headcount reductions would need support from stakeholders. Eskom is in the process of appointing financial advisers to “assist the company with possible balance sheet optimisation solutions,” they said in an emailed response to questions.

Eskom has been at the center of scandals involving the financing of transactions and awarding of contracts to firms linked to the Gupta family, who are alleged to have used their connections with former President Jacob Zuma to secure business and influence government appointments. Zuma and the Guptas deny any wrongdoing.

Debt due

The utility, which faces more than R62 billion due in principal debt payments in the next five years, has burnt through about R40 billion a year since 2013, according to data compiled by Bloomberg. The new management, brought in as president Cyril Ramaphosa took over leadership of the nation earlier this year, is struggling to pass measures aimed at improving its financial position.

The National Energy Regulator of South Africa gave Eskom permission to raise prices by 5.2 percent from April 1, far short of the almost 20 percent Eskom had applied for. The power utility implemented rolling blackouts last month for the first time since 2015 after protesters blockaded roads and attacked staff when wage negotiations broke down.

Workers have demanded a 9 percent annual salary increase annually for three years, while the utility had previously offered 5 percent. Eskom has since raised its offer.

‘Biggest risk’

Eskom, which Goldman Sachs Group Inc. said in September is the biggest single risk to South Africa’s economy, needs R72 billion of funding until the end of 2019, including the refinancing of a R20 billion loan obtained with a government guarantee, according to a March report published by Moody’s Investor Services.

The power company has been meeting investors since December to drum up demand for a new dollar bond but has so far failed to get enough support for the transaction, the people said.

“Eskom regularly engages with various stakeholders including financial markets stakeholders as a matter of course,” Eskom officials said in the response to questions regarding the bond sale. “Various funding sources are accessed as and when market conditions are conducive to do so.”

Biggest holders

At least R20 billion of unsecured bonds and $4 billion of dollar-denominated notes aren’t guaranteed by the government, according to data compiled by Bloomberg. The largest holders of the dollar-denominated bonds include credit funds such as Ashmore Group Plc, BlackRock Inc., and T Rowe Price Group Inc., the data show.

Representatives for Ashmore and BlackRock declined to comment on their holdings. A spokeswoman for T Rowe Price didn’t reply to an email seeking comment.

Eskom’s dollar-denominated bonds fell across the board on Tuesday. Its $1.75 billion of notes due January 2021 declined 1.3 cents on the dollar to 95 cents, according to data compiled by Bloomberg. A $1.25 billion bond maturing in February 2025 fell 1 cent on the dollar to 94 cents.

Credit-default swaps insuring against a company default for the next five years rose to 510 basis points on June 19, the highest level since 2016, according to data compiled by Bloomberg. The contracts were quoted at 489 basis points on Tuesday, implying a 28 percent probability of default by 2023, according to CMA, part of ICE Data Services.