Water and Sanitation Minster Nomvula Mokonyane acted this week to allay investor concern at the lack of a properly constituted board at the state-owned Umgeni Water Board, although serious doubts remain about corporate governance at the state-owned utility. Umgeni Water is SA’s second-biggest water board and provides potable water to about 6-million people and raw water to industry in KwaZulu-Natal. It has a turnover of R2.4bn and a five-year capex programme of R7bn. The utility’s acting CEO, Thami Hlongwa said on Wednesday that there was no reason for concern that Umgeni would be unable to honour its debt obligations. It has two bonds in issue, together worth R1.535bn, and a loan from the European Investment Bank of R385m. Umgeni’s debt would be met comfortably at maturity from cash flow and adequate provision had been made for this, said Hlongwa. Concern about corporate governance at the utility was first raised by asset manager Futuregrowth, a unit in the Old Mutual stable. Futur...
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