Eskom gets R5-billion government bailout amid 'enormous liquidity constraints'
Power utility Eskom has received an “advance” of R5-billion from the Public Investment Corporation (PIC)‚ on behalf of the Government Employees Pension Fund (GEPF)‚ the two bodies announced on Monday.
In a statement‚ the PIC and GEPF said it had agreed to advance Eskom the money as a “bridging facility” that would “fund the company’s operations during the month of February 2018”.
“The PIC was approached by Eskom‚ which indicated that it was experiencing enormous liquidity constraints‚ which were threatening the company’s going concern status. Following the request‚ the PIC conducted its own due diligence and obtained approval in line with its mandate and corporate governance requirements. The GEPF and PIC Board take comfort from the fact that the bridging facility is fully backed by a government guarantee and that the pricing for this transaction is favourable to GEPF‚” the joint statement said.
But this is just a fraction of the funds the power utility needs.
“In addition to the bridging facility‚ Eskom has approached other lenders as the utility needs a total funding of R20-billion. Three commercial banks have indicated that they are willing to further extend credit facilities to Eskom subject to the outcome of their respective due diligence processes‚ which are currently underway.
“The GEPF and the PIC will continue to closely monitor developments at Eskom‚” the statement said.
It continued that the bodies were encouraged by recent changes at Eskom‚ including the installing of a new board.