Media statement by the Ministry of Public Enterprises
30 July 2019
With respect to the announcement this afternoon at the Eskom annual results presentation by Mr Pravin Gordhan, the Minister of Public Enterprises on the appointment of a Chief Restructuring Officer (CRO) for Eskom, the Ministry of Public Enterprises wishes to provide clarity on the following:
- The board of South African Institute for Chartered Accountants (SAICA) agreed to a request from the Ministers of Finance and Public Enterprises to assist government with the establishment of an office for a CRO at Eskom;
- Mr Freeman Nomvalo, the SAICA CEO, has been designated by the SAICA board to lead a team of specialists for this purpose;
- He will remain the CEO of SAICA;
- He will lead the efforts to establish the CRO Office and build its capability that must include the expertise: corporate finance, debt management and balance sheet optimization.
- He will report to Ministers Finance and Public Enterprises and the Eskom board.
The immediate tasks for the CRO office will be to interrogate Eskom debt and various proposals to resolve Eskom’s burden and to engage investors with the Eskom Executive.
SAICA’s assistance will aim to reorganize the operational and funding structures of Eskom and to contribute to Eskom’s future sustainability in the interest of our country and economy.
SAICA’s statement to the media is attached hereto.
South African Institute of Chartered Accountants to assist Government regarding Eskom’s restructuring
The Chairman of the Board of the South African Institute of Chartered Accountants (SAICA), announces that the SAICA Board has agreed to a request from the Minister of Public Enterprises, Pravin Gordhan, and the Minister of Finance, Tito Mboweni, for SAICA to assist Government with the restructuring of its Eskom business through the establishment of the office of the Chief Restructuring Officer. SAICA will put together a team of specialists lead by SAICA’s CEO, Freeman Nomvalo.
The SAICA Board agreed to the request based on the importance to South Africa and its economy to avoid a possible downgrade at Eskom, which is likely to result in a sovereign downgrade if the Eskom restructuring is not urgently guided by responsible leadership.
At this point it should be mentioned that in the past SAICA has assisted Government with similar requests, particularly the multi-million rand programme assisting the Department of Higher Education and Training (DHET) with resourcing both finance and human resources functions with the necessary skills to improve the operational efficiency of the Technical and Vocational Education and Training (TVET) colleges throughout South Africa. This has been described as the most successful transformational project ever run in the sector.
The Board members of SAICA have agreed to assist Government in the following manner:
- SAICA is to assist government with a programme aimed at reorganising the operational and funding structures of Eskom for the purpose of making it profitable while at the same time meeting the country’s energy needs;
- This project will be part of SAICA’s Nation Building initiative;
- For this purpose, a team of appropriately qualified resources will be sourced by SAICA from its membership base and elsewhere as appropriate;
- The project will be led by the SAICA CEO who will spend some of his time on this project, which is currently estimated to conclude within a period of six months;
- The resources SAICA secures will be funded by the Department of Public Enterprises and National Treasury.
This appointment once again demonstrates the standing and importance of SAICA and the chartered accountancy profession in the achievement of sustainable economic development in South Africa. More detail will be communicated as it becomes available.
Issued by Adrian Lackay on behalf of Minister of Public Enterprises, 30 July 2019
