Funders wash hands of Eskom
The race to stave off insolvency began in earnest in July
● Eskom is in a tricky financial position and is desperately trying to avoid a liquidity crunch that may render it unable to pay both staff salaries and suppliers by January.
The power utility said on Monday it had 20 times less cash than it needed to continue funding operations, and had written to Public Enterprises Minister Lynne Brown alerting her of the impending calamity.
Without immediate access to cash, Eskom will be bankrupt by December.
Spokesman Khulu Phasiwe said: “It’s part of our normal reporting processes to inform the minister whenever we have a major reportable issue.
“Our target is a buffer of about R20billion working capital . . . We have in the bank slightly more than R1.2-billion.”
“Our liquidity levels are not at the desired levels”
On Monday, Fin24 and EE Publishers revealed the existence of an internal report that said that, to keep running, Eskom needs at least R8-billion monthly.
Phasiwe said the utility was “not where we should be as a company, which is still worrying”, adding Eskom had problems accessing previously agreed loans due to corruption and poor governance.
“Our funders have asked us to sort out our corporate governance, and that has made it difficult to access funding.”
Eskom interim chief executive Sean Maritz said: “Our liquidity levels are not at the desired levels; however, they are sufficient to fulfil our commitments.”
The Times can also reveal the race to stave off insolvency began in earnest in July, with Eskom holding meetings with the minister and the national Treasury.
On July 26 Eskom chairman Zethembe Khoza met Finance Minister Malusi Gigaba and Brown and requested that they rush the utility’s access to cash and help find solutions to the looming liquidity crisis.
Spokesman for Brown, Colin Cruywagen, referred all questions to Eskom.