South Africa's power utility refutes cash-crunch reports

South Africa's power utility refutes cash-crunch reports
An Eskom logo is seen at the entrance of their head offices in Sunninghill, Sandton
JOHANNESBURG (Reuters) - South African power producer Eskom is not facing liquidity challenges, the utility said on Sunday, after media reports alleging it would be unable to pay salaries by November.

Eskom, which produces nearly all of the electricity in Africa's most industrialised economy and exports energy to neighbouring states such as Namibia, is backed by more than $10 billion in government guarantees.

"Eskom refutes the notion that it is facing a cash crisis, and that it has only enough cash to last for the next three months," the state-owned utility said in a statement.

The state-owned power producer last week postponed the publication of its annual results without giving reasons, but said later that external auditors had raised "reportable irregularities".

Eskom has also come under scrutiny in the media after leaked documents put it at the centre of allegations of improper dealings in government contracts by the Gupta family, business friends of President Jacob Zuma. Zuma, Eskom and the Guptas have denied any wrongdoing.

"...the power utility is sitting on its last 20 billion rand ($1.5 billion). This means that unless something is done urgently, the parastatal could find itself unable to pay November salaries," the Sunday Times reported, citing the unpublished financial statements.

Eskom last month appointed Johnny Dladla as acting chief executive after Brian Molefe, who was at the helm for 18 months from 2015 and reinstated in May, was removed following growing concerns about governance.

Dladla, who has more than two decades' experience at the company, is the sixth person to take on the job of chief executive in three years.

"External auditors have confirmed Eskom as a going concern, and as a result, the company sees these reports as being inaccurate and misleading," Eskom said.

The company said it will publish its results on Wednesday.

($1 = 13.0182 rand)

(Reporting by TJ Strydom, editing by Louise Heavens)

2017-07-16 12:54:08

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