Eskom ac­knowl­eges liq­uid­ity squeeze

Chronicle (Zimbabwe) - - Business -

CAPE TOWN — Eskom yes­ter­day said it had se­cured just over half of its fund­ing re­quire­ments for the cur­rent fi­nan­cial year, as it ac­knowl­edged it was bat­tling a liq­uid­ity squeeze.

This came af­ter Fin24 ear­lier re­ported that the power util­ity’s poor gov­er­nance had left it tee­ter­ing on the edge of in­sol­vency, with only R1.2bn of liq­uid­ity re­serves ex­pected to be in hand at the end of the month. This was based on Eskom’s lat­est re­port to its share­holder rep­re­sen­ta­tive, Pub­lic En­ter­prises Min­is­ter Lynne Brown, which showed that its liq­uid­ity was fast dry­ing up, as it strug­gled to raise funds in an un­sym­pa­thetic mar­ket. Yes­ter­day evening, Eskom said it had noted the me­dia re­ports. Eskom’s interim group chief ex­ec­u­tive Sean Maritz said that while the power util­ity’s liq­uid­ity lev­els were “not at the de­sired lev­els”, they were suf­fi­cient to ful­fil its com­mit­ments. Eskom said it has al­ways main­tained that the 2.2% tar­iff in­crease for the fi­nan­cial year 2017/2018 will present chal­lenges to the com­pany’s liq­uid­ity po­si­tion. “As a re­sult, Eskom has had to un­der­take cer­tain fi­nan­cial com­mit­ments to en­sure suf­fi­cient liq­uid­ity in line with its fund­ing re­quire­ments,” it stated.

The power util­ity said it had, to date, se­cured “ap­prox­i­mately 56%” of the fund­ing re­quire­ments for the cur­rent fi­nan­cial year.

It added that the re­main­ing fund­ing re­quire­ment were largely de­pen­dent on it con­sti­tut­ing a new board of di­rec­tors, re­solv­ing what it termed “in­ter­nal gov­er­nance re­lated mat­ters”, fill­ing a num­ber of per­ma­nent ex­ec­u­tive po­si­tions, and “rem­e­dy­ing the is­sues that gave rise to the qual­i­fied au­dit opin­ion on the FY17 fi­nan­cial re­sult”. — Fin24

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