Eskom runs out of cash as loan facilities dry up
Cash-strapped power utility asks ministers for help as it scrambles to stave off insolvency amid liquidity crisis
Eskom is in a precarious financial position and desperately trying to avoid a liquidity crisis that may render it unable to pay staff salaries and suppliers by January. The utility confirmed on Monday it had 20 times less cash than it needs to continue funding operations, and has written to the public enterprises minister alerting her of the impending calamity. By the end of January, the utility will run on a cash deficit of R5bn. This eventuality will come even as Eskom expects to successfully drawdown R3.8bn from existing credit facilities during the next few weeks. Business Day can also reveal that the race to stave off insolvency began in earnest in July, when Eskom held meetings with its shareholder minister and the finance minister. On July 26, Eskom chairman Zethembe Khoza met with Public Enterprises Minister Lynne Brown and Finance Minister Malusi Gigaba, requesting they expedite Eskom’s access to cash and help find solutions to the looming liquidity crisis. This was 10 days...
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