WASHINGTON, Nov. 1, 2022 /PRNewswire/ — CRO Advisors is seeking Eskom Creditors Consent to begin the process of moving South Africa Utility Eskom’s distressed power plants into a new Asset Recovery Vehicle (ARV). Gaining creditors consent is the ‘first step’ required to begin the restructuring of Eskom, which is financially and operationally insolvent.
Eskom’s ~500BN (Rand) on balance sheet debt, ~128BN off balance sheet debt, and 1,072BN in unavoidable capital requirements over the next 5 years, represents a staggering 76% of South Africa‘s total debt.
South Africa is facing a Catastrophic collapse of Electricity Utility Eskom and the domestic Energy Sector, industrial output and the overall economy. Stage 8 Load-Shedding or worse and the potential collapse of the transmission grid seems unavoidable without immediate action.
The ARV is the only way Eskom Creditors will have a chance to recover their capital investment in Eskom debt securities. There can be no financial restructuring without a complete ringfencing of the power plants to protect the existing creditors.
All Creditors are requested to send their confidential statement of holdings, and willingness to support the ARV to [email protected].
Under the ARV, the Eskom Creditors would own a majority stake in the new structure, via a debt for equity swap, in addition to the establishment of an Employee Stock Ownership Program (ESOP) which would primarily benefit the South Africa management and operations personnel. The ARV will take control of all power plant operations, fuel procurement, and maintenance requirements and provide electricity to Eskom under long term contracts to be negotiated.
Once Eskom creditors agree to the ARV, negotiations will be held with the South Africa Treasury and other financial institutions, which will be required to provide ‘financial guarantees’ to support all contractual structures, in addition to other ancillary contracts.
CRO Advisors is firmly against international investors providing any further capital injections at this time. Nor does CRO Advisors approve the divestment of any Eskom Transmission & Distribution assets, until the Power Plants are put into the ARV.
About CRO Advisors:
CRO Advisors are specialists in very large and complex debt and operational restructuring’s in the Energy & Infrastructure sectors, including Power Generation, Transmission, Distribution, Natural Gas Pipeline, Fuel Storage Terminals, and other critical infrastructure assets.
Contact: Mr. A. Malouf
Email: [email protected]
561-313-1353
Website: www.icroadvisor.com
SOURCE CRO Advisors
