Government forced to give Eskom emergency bailout
Eskom is operating much closer to the edge than most investors realise, says Intellidex's Peter Attard Montalto
Less than a week after Eskom CEO Phakamani Hadebe announced that “the days of surprises are over,” documents show that government was forced to pay R5bn in emergency funds to meet the power producer's debt obligations. The payment on April 2 was intended to let Eskom pay bills due at the end of March, and avoid a call on its existing guarantees after a loan expected from the China Development Bank failed to come through in time. The amount repaid a R3bn bridge loan from Absa, according to a letter to parliament from Finance Minister Tito Mboweni which was released by the DA. “The key here is that this news has been buried in parliament, though in the public domain it is exceptionally hard to find out, and not communicated openly with Eskom creditors,” said Peter Attard Montalto, head of capital-markets research at Intellidex. “Eskom is operating much closer to the edge than most investors realise. Given the blanket National Treasury guarantee this is not an issue for Eskom, per se, ...
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