Eskom’s financial report is being released a month later than required by JSE rules‚ which prompted the exchange to warn it last week that its debt securities would be suspended if it did not publish before end-January.
The delay was caused by a growing liquidity crisis after it was granted only a 5.23% tariff increase for 2018-19 rather than the 19.9% it applied for. It required a R20-billion funding injection but its key lenders remained dissatisfied about extended delays in appointing new executives to replace those tainted by allegations of corruption.
Last week a new chairperson‚ Jabu Mabuza‚ was appointed‚ together with other senior executives.
Mabuza said the first points the board had had to address were finding a solution to liquidity‚ addressing governance and releasing the interim results before the end of January. These steps would restore investor confidence in the organisation.
Several executives had departed and the new team had spoken to bankers and lenders to explore various options to fund the utility’s cashflow needs‚ Mabuza said.
Hadebe said he was confident the R20-billion Eskom needed would be advanced.
Mabuza said new management was discussing a future price path with the National Energy Regulator of SA. He said good progress had been made in addressing the auditors’ qualifications and it was likely to be cleared by year-end.
'Poor leadership' cited by Eskom interim CEO Phakamani Hadebe
Image: FILE PHOTO
Power utility Eskom’s liquid assets dwindled to R9-billion at the end of September from R30-billion a year previously‚ after a tariff increase of only 2.2% and a 1.9% decrease in electricity sales volumes‚ it said on Tuesday.
Its auditors issued an unqualified review but with an “emphasis of matter” on its ability to continue as a going concern for the next year to 18 months. At the end of September‚ its gearing ratio (debt to equity) had risen to 72%.
Interim CEO Phakamani Hadebe said Eskom had reached this point because of poor leadership. Decisions that had to be made were not taken and there was a lack of management integrity. As a result‚ funders felt they could no longer engage with Eskom. It also had to address the capital structure of the balance sheet. Eskom could not continue to rely on borrowings.
'Shape up or ship out' - Brown issues stern warning to SOE boards
Eskom’s financial report is being released a month later than required by JSE rules‚ which prompted the exchange to warn it last week that its debt securities would be suspended if it did not publish before end-January.
The delay was caused by a growing liquidity crisis after it was granted only a 5.23% tariff increase for 2018-19 rather than the 19.9% it applied for. It required a R20-billion funding injection but its key lenders remained dissatisfied about extended delays in appointing new executives to replace those tainted by allegations of corruption.
Last week a new chairperson‚ Jabu Mabuza‚ was appointed‚ together with other senior executives.
Mabuza said the first points the board had had to address were finding a solution to liquidity‚ addressing governance and releasing the interim results before the end of January. These steps would restore investor confidence in the organisation.
Several executives had departed and the new team had spoken to bankers and lenders to explore various options to fund the utility’s cashflow needs‚ Mabuza said.
Hadebe said he was confident the R20-billion Eskom needed would be advanced.
Mabuza said new management was discussing a future price path with the National Energy Regulator of SA. He said good progress had been made in addressing the auditors’ qualifications and it was likely to be cleared by year-end.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Related articles
Latest Videos