State-owned entity to sell non-core assets to boost its beleaguered balance sheet.
EMBATTLED power utility Eskom said on Thursday that property worth about R600 million had been put on the open market to boost its balance sheet.
In 2021, Eskom told the media it aimed to raise a minimum of R2.5 billion from the sale of its “bad stock”, or non-core assets.
On Thursday it said that figure was likely to increase as the entity identified more properties for disposal over the next five years. Further evaluations were being done to put more properties up for sale.
Eskom’s media department said: “Eskom is currently verifying its property portfolio and analysing the existing stock with the intention of retiring properties that meet the criteria for inclusion in the disposal programme. Currently, properties that have been retired or are in the process of disposal are worth R600 million. This is out of the overall approval of properties worth R2.25 billion.”
Eskom intends to dispose of what is referred to as “bad stock”, which consists of non-core properties that have reached the end of their economic life cycle and are underutilised and no longer required to support the core business of Eskom.
Many of these properties are residential properties. As a result of the utility’s office space optimisation project, a few office buildings also form part of the disposal programme.
“It is the shareholder’s position that properties are first made available to the government, particularly the Department of Human Settlements for its housing programme,” Eskom said.
This policy forms part of its disposal programme, in alignment with Eskom’s corporate plan for the full years 2023 to 2027 (Revision 12), which intends to strengthen its balance sheet and reduce operational costs, with the proceeds of the sales reverting to Eskom coffers to be allocated as required.
“More importantly, Eskom will save the upkeep costs, rates and taxes associated with these properties,” it said.
Eskom said the disposal of non-core retired properties would only be conducted through internal and public listing. Currently, the shareholder’s policy on the disposal of non-core assets prohibited the use of an auction.
Eskom is weighed down by a debt of of roughly R400 billion and is forking out billions of rands to buy diesel to keep the lights on amid unprecedented load shedding.
Earlier this month, Eskom’s outgoing CEO André de Ruyter told Parliament that the struggling power utility would need a lot more money if the country hoped to see a reduction in power cuts.
De Ruyter said Eskom needed debt relief in combination with tariff increases to survive.
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