By Kopano Gumbi
Once the last contractor has been cleared out, and the books have been closed on the shady administrators—Eskom’s debt will still be a monster lurking in the dark, one that is likely to haunt them for year. The company, which provides power to 55 million South Africans as well as to countries like Lesotho, Zimbabwe and Zambia, has not been able to meet its debt obligations for months now.
“We are paying our creditors on time,” said Chairman Jabu Mabuza when he was pressed on the financial status of Eskom. He went to great pains to explain that since releasing its interim results last week, management has been on the road, talking to stakeholders, investors and ratings agencies to reassure them that they would get their money.
How this will happen is yet to be explained. With R400 billion or $28 million in debt and “liquidity issues” as Public Enterprise Minister Pravin Gordhan describes it—the public are understandably as concerned about the utility as investors are. Rumours have been swirling that the utility would look to the National Treasury for assistance and the minister did little to allay any such concerns.
“The issue is being discussed in government, sometime in the new year we will come back with that,” is all that was said when asked to explain how the government envisioned paying back the money.
Eskom bondholders didn’t take too kindly to that comment and by the end of the press conference, they had sold off the state-owned enterprises’ 21 bonds by about 75 basis points, said Intellidex’s Peter Attard Montalto. The parastatal, according to Montalto, is sending mixed signals about whether it is able to meet its debt obligations, and that is what has led to the jitters.
Both the minister and the chairperson say that collaboration is the best way to come up with solutions to the challenges at Eskom and that they have not closed their eyes or ears to alternative approaches.
“We can’t deal with the debt without dealing with the operational”