The Monty Python quote to “always look on the bright side of life” comes to mind considering that Eskom’s dollar bonds actually surged – although not to unprecedented levels – but rise they did after yesterday’s annual financial results announcement.
This is despite the fact that board chair Jabu Mabuza had to face a packed media briefing and confirm what had been feared all along – that the power utility was yet again recording a massive loss.
Earlier that deficit was predicted to be around R25 billion.
At a conference in Lisbon last month Anton Eberhard, who’s one of the government appointees tasked with the near insurmountable task of pulling Eskom back from the brink, confirmed that a loss of R25 billion was on the cards.
A major part of the problem, it has been said, is the parastatal’s inability to raise revenue to levels that will enable it to service its debt.
Exacerbating matters was the figure of R15 billion, touted when Eskom’s interim results were announced and warnings were uttered that come yesterday’s annual results it would probably amount to that.
Well, the R20.7 billion loss Mabuza announced is substantially more than the R15 billion initially predicted, but is also not quite the R25 billion that was feared.
And so, taking comfort from what seems like Eskom finally being able to stem budgetary bleeding, foreign investors appeared to savour some taste for the utility’s bonds. Figures of what the bond buying amounted to were not available at the time this report was posted.
Don’t think though it’s going to make much of a difference to the utility’s R440 billion debt burden. Rather look at it as a mild flicker of hope – and that’s very mild – of a parastatal in a death spiral.
