17 July 2017

South Africa: Eskom Refutes Cash Crisis Media Reports

Eskom has refuted weekend reports stating that it is facing a cash crisis.

In a statement on Sunday, the power utility refuted the claims regarding its financial sustainability.

"Due to limitations around disclosing financial information before the official announcement, which is scheduled for Wednesday 19 July 2017, Eskom is not in a position to respond comprehensively to the specific issues raised at this stage.

"Having said this, 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," said the utility.

The power utility said external auditors have confirmed Eskom as a going concern.

"As a result the company sees these reports as being inaccurate and misleading. It is important to reiterate that Eskom is not facing any liquidity challenges, and that the company is confident that it will maintain sufficient liquidity to support its operations," it said.

Eskom also highlighted the following:

The 2014/15 annual financial results stated an emphasis of matter in relation to its going concern, which was addressed and subsequently removed in the 2015/16 financial year.

While Eskom's financial position has always been supported by significant reliance on debt and borrowings, its improved overall financial and operational performance over the last two years has led to an improved balance sheet.

Eskom also has sufficient government guarantees to execute its funding plan.

Eskom has also maintained access to capital markets and raised committed funding.

"The details about Eskom's operational and financial performance will be announced on Wednesday where members of the media and other key stakeholders have been invited.

"Eskom will continue to meet with a number of stakeholders ahead of releasing the results this week," it said.

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