Eskom in danger of being sunk by debt
The electricity business lost R4.6bn, and auditors have raised doubt about the utility's going-concern status
Eskom's annual results show that the situation has grown worse, not better, at the state-owned electricity company. Sales fell, it posted hefty losses, and its ability to meet debt obligations has deteriorated, casting doubt on its ability to continue as a going concern. The results, presented on Monday, revealed a loss for the year of R2.3bn at group level, which includes subsidiaries. The loss for the electricity business was R4.6bn for the year. Auditors flagged both the going-concern status and irregular expenditure of R19.6bn, resulting in a qualified audit. Interest costs soared by 60% over the past year. This situation was likely to worsen as the capital build project neared completion, said independent analyst Chris Yelland. Eskom expects to pay R215bn in interest payments alone over the next five years. Eskom chairman Jabu Mabuza pointed out that “the bulk of the 12-month reporting period fell outside of our tenure”, and the new board and CEO had been in charge for only 69 ...
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