NEWS

Eskom Admits It Is Almost Broke But Says It Can Keep Its Commitments

The power utility insists it can still meet its operational demands.

14/11/2017 06:32 SAST | Updated 14/11/2017 06:32 SAST
Mike Hutchings / Reuters
Pylons carry electricity from a substation of state power utility Eskom outside Cape Town in this picture taken March 20, 2016.

Eskom has admitted that it is battling to prevent a liquidity freeze, with the power urility confessing on Monday that it had only secured half of its funding requirements for this financial year, Fin24 reported.

On Monday, Fin24 revealed that Eskom was on the brink of insolvency, and that it had only R1.2-billion of liquidity reserves left.

On Monday night, Eskom reportedly admitted that its liquidity levels were not at the desired levels, but said that there was enough money at hand to fulfil the power utility's commitments.

Eskom's group chief executive Sean Maritz reportedly said that Eskom had secured about 56% of its funding requirements.

"Eskom is confident that the board of directors and the executive management team with the support of the South African government will address the above-mentioned issues that have negatively impacted its liquidity. As such, Eskom will maintain sufficient liquidity to support its operational and financial requirements," Maritz stated.

According to Business Day, this means that Eskom has 20 times less cash than it needs to fund its operations. Eskom wrote to public enterprises minister Lynne Brown informing her of its position.

Meanwhile, it has emerged that Eskom began trying to prevent insolvency in July, 10 days after it denied that it was on the verge of bankruptcy.

Business Day reported that Eskom executives met with Brown and finance minister Malusi Gigaba in July in an effort to prevent insolvency.

The Sunday Times revealed in July that Eskom would run out of money in three months, but Eskom denied this.