October is deadline for Eskom with CEO, rescue plan awaited

30th September 2019 By: Bloomberg

Debt-laden South African power utility Eskom Holdings has narrowed its search for a new chief executive officer as the government finalizes a plan to rescue the business.

The measures are key in a state effort to overhaul what’s seen as the biggest threat to South Africa’s economy: the company has amassed R450-billion of debt, equivalent to about 7% of gross domestic product. Both are expected to be finalized next month: the deadline for the announcement of the CEO is October 31, while Public Enterprises Minister Pravin Gordhan said this month the rescue plan would be announced within weeks.

Eskom has been looking for a new CEO since Phakamani Hadebe in July became the tenth person to vacate the post in as many years. Chairperson Jabu Mabuza took on the role in an acting capacity until a permanent appointment is made.

Andy Calitz, who started his career as an electrical engineer at Eskom, is one of three people shortlisted to become the next CEO, according to two people familiar with the process who declined to be identified because the information isn’t public. Another is former CEO Jacob Maroga, one of the people said. They didn’t identify the third person on the list.

Dan Marokane, Eskom’s former head of group capital, is among people who applied for the job, a person with direct knowledge of the situation said last month.

Eskom, which supplies about 95% of South Africa’s power, has been granted R128-billion in state bailouts over the next three years to remain solvent. The government has proposed splitting the utility into generation, transmission and distribution units and is evaluating a range of options to reduce the costs of the debt and improve its performance.

The Department of Public Enterprises on Friday declined to commit to a date for the paper’s release.

“We will announce it at the appropriate time,” said Richard Mantu, a spokesperson for the department.

Applications for the CEO position closed on August 2 and interviews were held with Eskom earlier this month. The government, the utility’s primary shareholder, will ultimately make the appointment.

Eskom said an announcement will be made on the appointment by October 31, when the recruitment process ends. It declined to comment further.

A spokesperson for Calitz declined to comment. Maroga didn’t immediately respond to a request for comment sent by text message.

Neither candidate said to have made the shortlist has been involved with the utility for about a decade or longer. Eskom accepted Maroga’s offer to resign in 2010, but he claimed he’d been unlawfully dismissed and filed an unsuccessful application for reinstatement.

Calitz, a former CEO of LNG Canada, started his career at Eskom and later held various senior posts at Royal Dutch Shell.

Eskom is also seeking advisers and has issued an invitation to tender for “financial services for implementation for government support package” on August 23, according to a document seen by Bloomberg. The tender, which closed on September 3, requires that the team provide its record in “providing holistic solutions to restore the viability of companies in financial distress for transaction values in excess of $1-billion.”