Eskom toys with idea of selling some assets

ESKOM might sell some of its assets to raise capital as it scrambled to light up Africa’s most advanced economy, the utility’s chief executive Tshediso Matona said this week.

Eskom, which provides virtually all of South Africa’s power, faces a funding crunch as it races to bring new power plants online to stave off an electricity crisis.

“We have serious financial constraints and extraordinary decisions are required,” Matona told the Reuters Africa Investment Summit.

“And we are doing that work right now to unlock cash from our balance sheet… We are looking at what we can do with our assets such as our property portfolio,” he added.

Aside from properties and a fleet of cars, Matona also mentioned the Eskom Finance Company, which is a home loan book for its employees.

“We can sell that book to the private sector or find other ways to use that book to unlock cash. All of these things are on the table,” he said, while also stressing that no decision on asset sales had been made.

“The government says don’t just look at us, see what you can do for yourselves.”

The government has said it aims to sell “non-core” assets to shore up Eskom, but this was the first time the utility has signalled it might do so on its own.

Its funding gap to 2018 is estimated at R200 billion and it is getting a R23bn cash injection from the government this year.

The cost was prohibitive though lower crude prices had helped and Matona said that the power utility had secured sufficient diesel until the end of this month, when the company’s financial year ended, and was confident it would be able to buy enough next year.

The parastatal was also working on switching to cheaper gas from diesel, with possible imports from neighbouring Mozambique, but this would not happen on any scale for at least another year.

Meanwhile, the National Union of Mineworkers (NUM) said on Friday it would oppose any attempt by Eskom to sell assets, especially its finance company which helped provide home loans to employees.

“The NUM will never support any decision that will affect its members and other employees at the company,” said NUM spokesman Livhuwani Mammburu.

NUM claims about 16 000 members at Eskom, which has about 46 000 employees, according to the company’s website.

Mammburu said that NUM was especially concerned about any sale of the Eskom Finance Company because its members would have “a harder time getting such finance from a private bank or other private company”.

He said attempts to cut costs or raise cash by the company must not take place “at the expense of the workers”.