South Africa’s indebted power utility Eskom was already searching for a CEO and an executive to lead a turnaround of the company. It will now have to cast its net even wider to include a treasurer.
Eskom’s 96-year history is replete with former CEOs who rose from within the debt-laden state utility to run the company. There are few obvious choices for the next CEO to come from those same ranks.
Eskom expects to report a loss of more than R15-billion in the year to 31 March, a record for any state-owned company.
Eskom is locked into a permanent loss situation and revenue is structurally limited. Expenses have ballooned due to inefficiencies, and electricity tariffs are not cost-reflective.
Eskom’s first-half profit plunged 89% and the situation at the South African state-owned power utility is likely to worsen in the next six months, chairman Jabu Mabuza said on Wednesday.
Eskom bought itself some financial breathing room after signing a R20bn short-term credit facility with a group of banks. The power utility needed the liquidity to see it through to the financial year that starts