Eskom Record Loss Not as Huge as Forecast, Spurring Bond Rally
- Power utility’s ballooning debt wasn’t as big as some feared
- Eskom sees similar loss this year, still needs government help
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Eskom Holdings SOC Ltd., South Africa’s debt-ridden power utility, reported a record annual loss of 20.7 billion rand ($1.46 billion), but its dollar bonds rallied on optimism that it is starting to stem the bleeding.
Eskom’s loss for the year through March widened from 2.3 billion rand the year before as power sales generated insufficient income to cover its operating costs and interest payments. The utility, which generates about 95% of the nation’s electricity, had amassed net debt of 430.8 billion rand at the end of the financial year and the government is giving it a 128 billion-rand bailout over the next three fiscal years to keep it afloat.