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SA: Eskom refutes cash crisis reports

by: Category: Banking & Finance, Construction, Energy, Featured, In Focus A+ / A-

South African state-owned power utility Eskom has refuted weekend media reports concerning its financial sustainability.

“Due to limitations around disclosing financial information before the official announcement, which is scheduled for Wednesday 19 July 2017, Eskom is not in a position to respond comprehensively to the specific issues raised at this stage,” the parastatal said in a statement over the weekend.

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.

External auditors have confirmed Eskom as a going concern, and 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.

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.

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