SOUTH AFRICA/BANKS AGREE ON DEBT REPAYMENT PLAN
South Africa will repay 13 pct of its
frozen 13 billion dollar debt to foreign creditors over the
next three years under an agreement reached today in London,
Finance Minister Barend du Plessis said.
    He said South Africa already had repaid five pct of the
debt under the standstill agreement expiring on June 30, 1987.
   "These arrangements confirm South Africa's continued
willingness to maintain good relations with its foreign
creditors and to meet its foreign commitments in a orderly way,"
du Plessis told a news conference.
    Du Plessis said the new interim debt agreement was
"substantially a continuation" of the arrangement ending in June
and calls for South Africa to continue paying all interest on
its total foreign debt of 23 billion dlrs.
    The new debt standstill will extend from July 1, 1987, to
June 30, 1990, with a three pct down payment permitted on July
15, 1987, "provided such debt has already reached maturity," du
Plessis said.
    Finance Minister Barend du Plessis told a new conference
that 34 banks holding more than 70 pct of the frozen debt
agreed to the new arrangement worked out with South African
negotiators in London. About 300 other creditor banks also are
expected to approve the agreement, he said.
    Reserve Bank governor Gerhard de Kock said the agreement
was a "good deal" both for South Africa and the banks and added
that the three-year length of the agreement was of "enormous
significance" to South Africa.
    Reserve Bank governor Gerhard de Kock said the agreement
was a "good deal" both for South Africa and the banks.
    Besides the 13-billion-dlr frozen debt, South Africa also
owes ten billion dlrs of debt that includes a significant
amount of medium -term liabilities that will continue to be
repaid on normal maturity dates.
    The 13 pct to be repaid under the standstill amounts to
1.42 billion dollars.
    A total of five pct or 508 mln dlrs will be repaid in the
second half of 1987, with 3.5 pct or 400 mln dlrs in calendar
1988, three pct or 346 mln dlrs in calendar 1989 and 1.5 pct or
166 mln dlrs in the first half of 1990.
    Du Plessis said 34 banks holding more than 70 pct of the
frozen debt agreed to the new arrangement worked out with South
African negotiators in London.
    About 300 other creditor banks also are expected to approve
the agreement, he said.
    De Kock, speaking at the same news conference, said the
three-year length of the agreement was of "enormous significance"
to South Africa.
    De Kock said South Africa had negotiated from a "position of
basic economic financial strength."
    "We were never overborrowed to begin with and we are now
underborrowed by all international criteria that I've ever
heard of," he said.
    Du Plessis said available foreign reserves of the Reserve
Bank, which increased by about 800 mln dlrs in the past two
months, and a continued current account surplus "will be
sufficient" to meet terms of the new interim debt agreement.
    Du Plessis said the banks were showing much more confidence
in the South African economy and country as a whole.
    He attributed this to "restoration of law and order which
has greatly reduced not only the extent of unrest but also the
intensity of unrest."
    South Africa has been under a state of emergency since June
1986 because of black political violence that has claimed over
2,400 lives in the past three years.
    Du Plessis said no political demands were made by the banks
and South Africa was now rapidly returning to very good
relations with its foreign creditors.
    He said there were encouraging signs that some foreign
investors were again "taking a more realistic view" of South
Africa.
    Recent examples were the rise in the financial rand and the
sharp increase in foreign exchange reserves.
    Of the 13 billion dlr frozen debt, 3.5 billion dlrs was
owed by the public sector and 9.5 billion dlrs by private
industry, du Plessis said.
    The remaining 10 billion dlrs consisted of seven billion
dlrs owed by government agencies and three billion dlrs by the
private sector.
 Reuter
