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 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. The government announced a record R69bn bailout for Eskom in February to be paid over three years. Of that, R23bn was to be used in the current financial year. Based on the 2% limit of the appropriated national budget, only R17.7bn can be transferred. The remaining balance will have to be subjected to the normal appropriation process when parliament is constituted after the May 8 election.
“Because were are in recess for the election period we can not process any new bills which have to go through a proper procedure of consideration and engagement with stakeholders,” Pinky Phosa, chairperson of the National Assembly appropriations committee, said by phone. “The new parliament will have to consider these reports once it takes over.
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