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Relief for financiers as loss-making PetroSA gets new board

Jul 06 2017 10:40

Cape Town - The Central Energy Fund (CEF) appointed an interim board for PetroSA as financiers seek assurances after PetroSA’s botched Project Ikhwezi made a R14.5bn loss.

PetroSA suffered losses of more than R14bn in the 2014/15 financial year, with the collapse of Ikhwezi seen as the biggest corporate loss ever for a state-owned company.

Four of the six board members resigned amid the turmoil, after CEF chairperson Luvo Makasi reportedly wrote to them asking them to do so. Makasi accused the board of financial mismanagement and failing to appoint a chief executive officer.

The two remaining board members, Owen Tobias and William Steenkamp, have not been included in the new interim board.

On Thursday, the CEF board said it appointed the interim board with effect from Wednesday.

“This decision is the culmination of a thorough assessment, consultation and engagement with all parties concerned cognisant of the financial sustainability and the strategic direction of the national oil and gas entity,” CEF spokesperson Jacky Mashapu said in a statement.

“The CEF board will work closely with the interim board to provide any requisite support and to ensure that its functioning is not hindered in its efforts to bring stability and sustainability to PetroSA.”   

Nhlanhla Gumede was appointed interim chairperson and Leanne Williams, Quentin Mathew, Noto Eister, Puleng Kwele, Boy Manqoba Ngubo, Dr Nomvuselelo Songelwa, Sepheu Simon Masemola and Mthozami Xiphu were appointed as additional interim board members.

The new board was appointed after financiers raised fears of board instability and deteriorating finances.

“Financiers have held a series of meetings with the CEF and PetroSA to seek assurance about their investments,” City Press reported on June 25. “Emails show that in the past three months, PetroSA and the CEF have had back-and-forth engagements with Absa, Standard Bank and Sanlam.”

City Press learnt that the financiers, who provided PetroSA with funding, guarantees and insurance for some of its capital projects, are concerned about the company’s deteriorating finances and board instability.

A senior CEF executive with knowledge of these meetings told City Press: “Just last week there was a teleconference between us and [insurers] Sanlam, based in London ... They had concerns about leadership. They are not happy about the number of acting people in key positions at PetroSA and CEF. But we allayed their fears and they were happy.”

cef  |  petrosa
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