Fun­ders wash hands of Eskom

The race to stave off in­sol­vency be­gan in earnest in July

The Times (South Africa) - - The Things You Need To Know Today - By SIKONATHI MANTSHANTSHA and KYLE COWAN

● 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.

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