PetroSA board asks for business rescue
The troubled state-owned oil company faces R2.2bn loss in year to March; business rescue viewed by some as a convenient escape from liability
The board of troubled state-owned oil company PetroSA has asked its holding company, the Central Energy Fund (CEF), to place it under business rescue, raising questions over its status as a going concern. PetroSA has suffered huge financial losses over the past three years, but it is unprecedented for a state-owned entity to ask to be placed under business rescue. PetroSA has a projected loss of R2.2bn for the year to March 2017. This follows its record R14.6bn net operating loss in the 2014-15 financial year. Despite these losses, PetroSA paid out large performance bonuses to its executives at the end of 2016, linked to the Ikhewzi project, responsible for a near R15bn impairment in financial 2014-15. State-owned companies, no matter how distressed, have avoided business rescue due to the loss of control over operations the move entails. Instead they have relied on Treasury loan guarantees to secure their going-concern status. Business Day understands that the PetroSA board approac...
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