September 18, 2018 / 2:55 PM / a month ago

South African utility Eskom delays completion of new strategy

JOHANNESBURG, Sept 18 (Reuters) - South African power firm Eskom said on Tuesday it had delayed the date on which its new long-term strategy would be completed, potentially unsettling investors anxious for clues as to how the struggling state firm plans to bolster its finances.

Cash-strapped Eskom has said the new strategy will assess whether its current business model is sustainable, or whether the firm should be broken up into separate entities overseeing power generation, distribution and transmission.

It will also consider ways of addressing Eskom’s declining electricity sales, shrinking cashflow and ballooning debt.

Eskom now plans for the strategy to be submitted to its board on Nov. 15, as opposed to the end of this month, it said in a statement.

Eskom is South Africa’s most indebted state firm and supplies more than 90 percent of the country’s power, making it critical to the health of Africa’s most industrialised economy.

“Management in consultation with the shareholder have agreed that the development of a well thought-out and stress-tested strategy blueprint of this nature and magnitude merits the slight delay,” Eskom said.

The firm, which employs around 47,000 people, has hired Boston Consulting Group to help with the new strategy.

Eskom has grappled with labour unrest this year which forced it into implementing the first power outages in South Africa since 2015.

It reported a 2.3 billion rand loss for the latest financial year, after which it announced plans to shed around 7,000 staff from its bloated workforce over the next five years.

Ratings agencies regularly cite Eskom as one of the biggest threats to South Africa’s sovereign credit ratings, which are near “junk” status. (Reporting by Alexander Winning Editing by James Macharia)

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