South Africa Set to Pick Dan Marokane as New Eskom CEO

Loni Prinsloo, S'thembile Cele and Paul Burkhardt
·2 min read
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(Bloomberg) -- Dan Marokane is expected to be appointed as the new chief executive officer of South Africa’s state power utility Eskom Holdings SOC Ltd. after an almost year-long search for a candidate, according to people familiar with the decision.

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The company’s failure to boost generation from its old and poorly maintained power plants has led to nationwide electricity outages — implemented to prevent a total collapse of the grid. The worsening situation has weighed on a process to fill the top job at Eskom, which has had 14 leaders since 2007.

“The process is with the shareholder to finalize and make the decision,” Eskom spokeswoman Daphne Mokwena said. She referred further questions to the government, which hasn’t made any formal announcement on the appointment. Ellis Mnyandu, a spokesman for the Department of Public Enterprises, declined to comment. A special cabinet meeting is scheduled for Friday, where the CEO appointment may be discussed.

The yield on Eskom’s dollar bonds due 2028 edged two basis points higher to 7.58% by 5:36 p.m. in Johannesburg. The rand was 0.7% stronger at 18.8361 per dollar, paring an earlier advance of as much as 1.3%.

Marokane, an engineer who was previously Eskom’s head of group capital and has served as CEO of troubled sugar producer Tongaat Hulett Ltd. since March, will have to begin the process of reviving the foundering utility months before South Africa votes in national elections. The energy crisis — the central bank has said that blackouts may have reduced the economic growth rate by as much as 3.2 percentage points last year — may in part result in the governing African National Congress see its support slip to as low at 45% next year, according to one survey.

Companies — reeling from blackouts and inefficiencies at the state-run logistics firm — have been slashing jobs to keep costs under control.

Andre de Ruyter said he would resign as CEO in December last year and quit the beleaguered company following a television interview in which he said that Eskom was losing about 1 billion rand ($53 million) a month to corruption and theft that could be connected to government officials and politicians. Calib Cassim, the company’s chief financial officer, has been the interim head since De Ruyter left.

In September, the search for De Ruyter’s successor raised tensions between the board of Eskom — which reported a 23.9 billion rand net loss for the past financial year — and Public Enterprises Minister Pravin Gordhan.

A month later, Mpho Makwana resigned as chairman of Eskom. He was replaced by Mteto Nyati, a former MTN Group Ltd. executive and ex-chief executive officer of Altron Ltd.

--With assistance from Amogelang Mbatha.

(Updates with cabinet meeting in third paragraph, market reaction in fourth paragraph.)

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