Eskom report ‘probes’ funding difficulties

JOHANNESBURG – An Eskom report which has been handed over to the Public Enterprises Minister Lynne Brown highlights an alarming picture of cash flow problems driven by perceptions of poor governance, EE Publishers and Fin24 have reported.

According to EE Publishers and Fin24, Eskom acting chair Zethembe Khoza has handed over a worrying report to Lynne Brown that paints a bleak picture of funding difficulties and dangers of liquidity at the power utility.

The document reportedly highlights serious cash flows to the power utility, adding that without any further funding, Eskom will have an approximate of R1.2 billion of liquid assets against a target of R20 billion at the end of this month.

Financial analysts say with this rate; Eskom will move into a negative liquidity position by the end of January 2018.

The document also adds compelling substance to Finance Minister Malusi Gigaba’s recent medium term budget statement that Eskom’s financial position is the most serious threat facing the economy.

The report also probes how the qualified audit opinion relating to irregular expenditure and continuous changes in leadership at the power utility have had a negative impact on investor sentiment, which has affected future funding.

It is understood that the power utility is in discussion with major South African banks to provide a short-term bridge-to-bond facility to mitigate funding risks.

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