Eskom has cash to last 'a few months', won't lay off staff
On Monday, the scandal-plagued power utility said it was not insolvent but was facing serious liquidity issues and would be in 'trouble' if the situation persisted.
JOHANNESBURG - Cash-strapped power utility Eskom has enough cash to pay wages and keep operations going for a few months and does not plan to retrench any workers despite a liquidity crunch, its spokesman said on Tuesday.
“The finance division has indicated there isn’t any hindrance to our ability to make those payments (wages),” Eskom spokesman Khulu Phasiwe said.
“This is why we’ve been negating these reports that we only have R1.2 billion in our coffers. Although we have not met our target of R20 billion in terms of reserves, we still have enough cash to keep us going for a few more months," he said without giving a timeframe.
On Monday, the scandal-plagued power utility said it was not insolvent but was facing serious liquidity issues and would be in “trouble” if the situation persisted.
Eskom, the sole power supplier in Africa’s most industrialised economy, is also in midst of leadership crisis and has been at the heart of allegations of illegal contracts and undue influence in awarding tenders to the Gupta family, friends of President Jacob Zuma.
Zuma and the Guptas have denied any wrongdoing.
Phasiwe said the firm’s sales growth had been muted while its operating cost was very high and its tariff for the current financial year was low.
“We are not insolvent, but we are projecting that if we continue along this trajectory we might be in trouble,” Phasiwe told Reuters.
“We as the company we need to sort ourselves out and get our house in order so that when we go out to the market to raise money these things do not become a hindrance,” said Phasiwe.
Online publication Fin24 and EE Publishers on Monday said the utility’s liquidity reserves are expected to fall to R1.2 billion by the end of November compared to a target of R20 billion.
In its annual results for the financial year ended in March, the utility reported a score of losses, saying it expected cash and cash equivalents to fall R8.6 billion to R20.4 billion.