South Africa’s presidency rebuked the chairperson of Eskom for publicly questioning the plan to restructure the State power utility.
The authorities are committed to ensuring that Eskom doesn’t end up in a worse financial position than its current one, with a broad range of interested parties involved in the discussions about the unbundling of the utility, presidency spokesman Vincent Magwenya said on Tuesday.
Magwenya’s comments came in response to Eskom chairperson Mteto Nyati, who warned last week that plans to transferring the power company’s transmission assets to an independent operator may trigger change-of-control provisions in lending agreements, create accounting complications and unsettle bondholders. Chief Executive Officer Dan Marokane in June said the unbundling needs to be handled in a way that’s sustainable for the company.
“It is unfortunate that Mr. Nyati creates an impression as if there’s a process that’s underway without the inclusion of Eskom and at the detriment of Eskom,” he said. “All of Eskom’s concerns are well known and have been thoroughly discussed in government and with Eskom.”
The dispute between the presidency and Eskom’s board highlights growing tensions over the sequencing of the utility’s break-up, with investors closely watching whether the transfer of transmission assets will weaken Eskom’s balance sheet or alter protections for creditors.
