“INVESTORS and business” disapproved of the interim appointment of Jabu Mabuza as CEO of Eskom, South Africa’s power utility, said BusinessLive.
They viewed the appointment as further evidence the South African government was “flat-footed” on what to do about the Eskom crisis, whilst the combination of the chairmanship – which Mabuza occupies on a full-time basis, with that of CEO makes for bad practice in terms of corporate governance standards, the newspaper said.
Credit ratings agencies last week flagged Eskom as a danger to South Africa’s debt profile, and the further government support to it was seen as credit negative for the country’s sovereign rating, said BusinessLive.
While Moody’s Investors Service and Fitch Ratings issued reports on South Africa last week, S&P Global Ratings was quoted by news agency Bloomberg on Monday saying that further bailouts for Eskom could weaken the government’s debt metrics further.
The agencies also expressed doubt that Ramaphosa would be able to restructure Eskom due to strong union opposition to changes that may dilute the utility’s state ownership or open up the electricity market to private competition, said BusinessLive.
“I have made myself available to serve as the interim executive chairman and acting group CEO of Eskom with a good appreciation of the importance of leadership stability in the company right now as we look at the implementation of a sustainable operational and financial turnaround plan,” said Mabuza in a statement on Monday night.
Eskom today reports its full-year financial results which are expected to show its largest loss to date, as much as R25bn in the negative as it struggles to pay interest on its debt which is somewhere between R450bn and R500bn.
