Eskom confident with plan
Ailing state entity admits during its interim financial results presentation being in dire financial situation
ESKOM says it is confident it will raise R20bn by the end of February as it proceeds with a plan to convert debt into equity to solidify operations and keep afloat.
The ailing state entity admitted to being in a dire financial situation yesterday during its interim financial results presentation for the period ended September.
It was a month late and was given an extension to today, failing which its bonds would be suspended from trading on the JSE.
The utility’s liquid assets had dwindled to about R9bn by end September from R30bn a year previously. It blamed a tariff increase of only 2.2% and a 1.9% decrease in electricity sales volumes for the drop.
Chairperson Jabu Mabuza said the new executive team would discuss future pricing with the National Energy Regulator (Nersa).
Eskom’s auditors issued an unqualified review with an “emphasis of matter” on its ability to continue as a going concern for the next year to 18 months.
The company blamed poor leadership, lack of cooperative governance and restrictions to access to funding as the main reasons for its parlous state.
Mabuza yesterday issued a warning to all officials that no pardon would be given to any senior officials, whether resigned or fired, found to be guilty after the investigations into corruption at Eskom.
“Poor leadership led to irregular expenditure at Eskom and a dire financial position, ” he said.
The DA yesterday called for Minister of Public Enterprises Lynn Brown to be fired.
“We call on Deputy President Cyril Ramaphosa to put his money where his mouth is,” DA MP Natasha Mazzone said.
“The first port of call in rooting out state capture is the department of public enterprises, the department that oversees the country’s state-owned entities (SOEs) and the largest utility in Africa, namely Eskom. The buck stops with the minister.”
Interim Eskom CEO Phakamani Radebe said that funders “ran for the hills” due to the rot of corruption at the power utility.
“We met with several investors who said that they could not get on board until we sorted out corruption issues at Eskom. Our access to funding has since been restricted,” he said.
The new board says that its top priority is to address governance challenges to boost investor confidence and significantly improve access to markets in order to raise the required funding.
The board together with the Treasury says its pursuing funding options to implement the group’s borrowing programme.