Eskom Granted R20 Billion Loan Facility Lifeline

A consortium of banks has granted Eskom a loan which the power utility says indicates their confidence in its turnaround plan.
JOHANNESBURG, SOUTH AFRICA JANUARY 30:(SOUTH AFRICA OUT): Eskom chairman Jabu Mabuza, CEO Phakamani Hadebe and acting Financial Officer Calib Cassim during the interim results announcement at Megawatt Park on January 30, 2018 in Johannesburg, South Africa. Hadebe alleged that increased levels of irregular expenditure at the power utility are a consequence of poor leadership. (Photo by Felix Dlangamandla/Foto24/Gallo mages/Getty Images)
JOHANNESBURG, SOUTH AFRICA JANUARY 30:(SOUTH AFRICA OUT): Eskom chairman Jabu Mabuza, CEO Phakamani Hadebe and acting Financial Officer Calib Cassim during the interim results announcement at Megawatt Park on January 30, 2018 in Johannesburg, South Africa. Hadebe alleged that increased levels of irregular expenditure at the power utility are a consequence of poor leadership. (Photo by Felix Dlangamandla/Foto24/Gallo mages/Getty Images)
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Eskom has signed a R20-billion loan facility to ease its cash flow problems, Eyewitness News (EWN) reported on Thursday.

"This R20-billion that we are now receiving, I'm sure if S&P had waited a bit, they were going to issue a different statement. But it's okay, I suppose because they needed to inform the market about how they felt about Eskom and the issues that are bedevilling Eskom," Eskom spokesman, Khulu Phasiwe said.

He added that he hoped this would the credit ratings agencies would view Eskom in a better light. Eskom was downgraded by Standard & Poor's this week.

According to Business Day, Eskom's interim group CEO Phakamani Hadebe said the loans were an indicator of the financial markets' "confidence in Eskom's turnaround strategy".

"We are cognisant of the challenges that are still ahead for the business and we are committed to ensuring that we expediently transition Eskom's operational and financial profile to adequate standards.

"Eskom remains a critical enabler for SA's economic growth and it is critical that we attain maximum operational efficiency for the business to avoid negatively impacting the macroenvironment," he reportedly said.

Meanwhile, Eskom will pay back the R5-billion loan it received from the Public Investment Corporation (PIC), which manages government employees' pensions, on Thursday, Fin24 reported. Eskom spokesperson Khulu Phasiwe reportedly confirmed this to Fin24 on Wednesday.

The GEPF manages the pensions of about 1.2-million people.

The Public Servants Association (PSA) was outraged at the time, saying the loan put the pensions of state employees at risk.

The PIC told Fin24 that this should never be allowed to happen again, and that the loan was irregular.

Cosatu reportedly welcomed the repayment of the loan, saying the PIC's assets, worth R1.9-trillion, are "for the workers".

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