South Africa’s Eskom looks to borrow $1.7 bln to ease financial crisis

S.Africa's Eskom looks to borrow $1.7 bln to ease financial crisis

JOHANNESBURG (Reuters) – South Africa’s Eskom will ask local banks to reopen lending facilities that were suspended last year, its spokesman said on Monday, as the state utility seeks to drag itself out of a crisis that poses a risk to the country’s financial stability.

National Treasury will support Eskom’s bid to persuade South African banks to lend the utility 20 billion rand ($1.66 billion), spokesman Khulu Phasiwe told Reuters.

“We are going to the market to try to see if we can raise that 20 billion rand we generally need as a company,” said Eskom spokesman Khulu Phasiwe, adding that they would approach the international market at a later stage.

The Johannesburg Stock Exchange (JSE) last week gave Eskom until the end of the month to submit its interim results or it would suspend trading of the power utility’s debt.

Phasiwe said Eskom would meet the JSE’s deadline. He said the delay in submitting results was partly because Eskom needed to reassure auditors about its liquidity position.

South Africa’s parliament is investigating Eskom over allegations executives at the utility were involved in unduly awarding contracts to friends of President Jacob Zuma.

Deputy President Cyril Ramaphosa named a new Eskom board on Saturday, ending a power vacuum that dates back to mid-2017 when then chairman Ben Ngubane resigned and government reversed Eskom’s decision to reinstate Brian Molefe as chief executive.

Finance Minister Malusi Gigaba said last week that Treasury cannot afford to bail out Eskom but would take action to tackle the company’s challenges.

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