Eskom denies it is ‘broke’
Power utility Eskom has denied that it is “broke”.
Responding to reports questioning its financial sustainability‚ the electricity provider said that due to limitations around disclosing financial information before the official announcement‚ which is scheduled for this coming Wednesday‚ it was not in a position to respond comprehensively to the specific issues raised at this stage.
“Having said this‚ Eskom refutes the notion that it is facing a cash crisis‚ and that it has only enough cash to last for the next three months‚” it stated.
The Sunday Times reported on Sunday that the scandal-plagued parastatal had only enough cash to last it for the next three months – but that it still wanted bonuses to be paid to axed CEO Brian Molefe‚ suspended acting chief executive Matshela Koko and others.
According to its annual financial statements‚ the Sunday Times report said‚ the power utility was sitting on its last R20-billion. This meant that‚ unless something was done urgently‚ the parastatal could find itself unable to pay November salaries.
The financial statements‚ which the Sunday Times said it had seen‚ were presented to Public Enterprises Minister Lynn Brown late last month. Her office refused to comment on Saturday‚ saying it was premature.
The power utility postponed the announcement of its results the night before they were scheduled to be made public‚ leaving industry analysts speculating about the reasons for the delay‚ the newspaper reported.
However‚ Eskom said on Sunday that external auditors had confirmed the parastatal as a going concern and that‚ as a result “the company sees these reports as being inaccurate and misleading”.
“It is important to reiterate that Eskom is not facing any liquidity challenges‚ and that the company is confident that it will maintain sufficient liquidity to support its operations‚” Eskom stated.
It said it wished to highlight the following:
- The 2014/15 annual financial results stated an emphasis of matter in relation to its going concern‚ which was addressed and subsequently removed in the 2015/16 financial year.
- Whilst Eskom’s financial position has always been supported by significant reliance on debt and borrowings‚ its improved overall financial and operational performance over the last two years has led to an improved balance sheet.
- Eskom also has sufficient government guarantees to execute its funding plan.
- Eskom has also maintained access to capital markets and raised committed funding.
“As stated above‚ the details about Eskom’s operational and financial performance will be announced on Wednesday where members of the media and other key stakeholders have been invited. Eskom will continue to meet with a number of stakeholders ahead of releasing the results this week‚” the power utility said.