Eskom con­fi­dent with plan

Ail­ing state en­tity ad­mits dur­ing its in­terim fi­nan­cial re­sults pre­sen­ta­tion be­ing in dire fi­nan­cial sit­u­a­tion

The New Age (Western Cape) - - Inside - THELMA NGOMA thel­man@the­

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.

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