JSE may suspend Eskom bonds over late financials

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Cape Town - The JSE has issued a warning to holders of Eskom bonds, saying it will suspend the listing if the power utility fails to submit its interim financial report.

In a note issued on Monday morning, the power utility said Eskom had failed to submit its interim financial report within the three-month period stipulated in the JSE’s debt listing requirements.

Eskom has until January 31 2018 to submit the interim report. If it fails to do so, the JSE can suspend the state-owned enterprise's debt securities.

The release of Eskom's interim results has been postponed since November 2017.

In December the power utility said in a media release that it was postponing its interim results announcement until “early next year (2018)” to review the impact of the 5.23% price increase granted by the National Energy Regulator of South Africa, and to allow its new board to review the financials.

“Eskom will release the results as soon as possible to ensure effective business continuity,” acting chief financial officer Calib Cassim said at the time.

According to JSE rules, a debt issuer may present a case via a written representation to avoid a suspension. “When the listing of debt securities of an issuer is under threat of suspension, the affected issuer shall be given the opportunity to make written representations to the JSE why the suspension should not be affected prior to the JSE making any decision to suspend such listing or registration,” it states. 

In response to questions from Fin24, the JSE’s general manager for issuer regulation, Andre Visser explained that trading can still take place pending the JSE’s final decision on whether it will suspend or not.

“The consequence of a suspension is that trades cannot be booked in respect of Eskom’s listed instruments and no further listed instruments may be issued in terms of their programme,” he explained. 

Eskom is yet to respond to Fin24’s queries.

Eskom issues debt in both domestic and international markets, and its bonds are listed on the JSE. 

Last week the power utility denied that it was facing imminent bankruptcy, with spokesperson Khulu Phasiwe maintaining that Eskom’s liquidity levels remained sufficient.

“The levels were subject to the execution of the funding plan until March 2018,” he told Fin24.

The power utility's debt was downgraded by major ratings agencies S&P Global and Moody’s in late November.  

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