Carol Paton Editor at Large

Eskom is to ask the government to take R100bn of its debt onto its own balance sheet as part of a package of measures to turn the troubled company around. While the move would give Eskom relief, it would add another two percentage points to the government’s debt-to-GDP ratio and could be seen as negative by credit ratings agencies. Currently, Eskom operates thanks to a R350bn debt guarantee from the government, which has been flagged as the biggest risk to the fiscus. Eskom chair Jabu Mabuza, who along with the utility’s officials is on an investor roadshow to London and the US, said in an interview on Tuesday that "cost compression, revenue enhancements and debt relief are the core of the turnaround strategy". The size of the proposed debt relief was R100bn and would entail government "taking that into its own balance sheet". Eskom, which supplies most of SA’s electricity, has massed R419bn of debt over the past 10 years due to its huge capital build programme. It is now unable to ...

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