Johannesburg – State-owned PetroSA says its board
does not intend placing the company under business rescue.
The petroleum company notes in a statement issued
on Monday that its financial report, for the year to March – which is currently
being prepared – shows an “adequate” cash balance.
In addition, PetroSA says, its current assets and its
cash flow projections show that the company will have adequate cash resources
for the business to carry on with its normal trading activities and meet its
financial obligations for the foreseeable future.
“The present position of the company is that it is
not in financial distress.”
PetroSA’s statement comes after it said it was set to suffer a projected devaluation of
assets of R1.1 billion this financial year, in addition to the R14.5 billion in
impairment it suffered in the 2014/15 financial year.
PetroSA in March
gave Parliament’s portfolio committee on energy an insight into several
investigations into the R14.5 billion loss resulting from mostly the failed
Project Ikwezi, which brought in much less gas than anticipated after the
company spent billions on infrastructure.
“There are
indications that production assets were overstated by R1.1bn for the year
ending March 2017,” acting CFO Webster Fanadzo was quoted by ANA as saying,
adding that the latest impairment did not mean that PetroSA lost or damaged any
assets.
PetroSA said it
had a cash balance of R2.5 billion.
In addition, Energy Minister Mmamoloko Kubayi has lashed out at the executives of
PetroSA for paying themselves millions of rands in bonuses after the entity had
suffered the financial loss.
Read also: PetroSA assets to be devalued by R1.1bn
PetroSA notes it has
correctly accounted for the Ikwezi abandonment
liability and has set aside a partial amount in a special purpose vehicle towards
meeting this obligation. It should be noted that this liability is not
immediately due.
It adds it is planning for the scheduled
maintenance shutdown of the refinery towards the end of 2017.
In the statement, the state-owned company says it
has embarked on a detailed turnaround plan, which includes the partial
modification of the refinery to produce fuels from light crude (condensate).
“PetroSA is already producing almost half of its
planned production capacity from light crude. There has not been any
breakdown of the refinery as a result of the processing of condensate, after
the modification.”
It says: “Other turnaround initiatives are at
embryonic stages and some will take longer, since they will require support
from the shareholder and approvals at other levels. These, by their very nature,
have long lead times before they reach maturity.”
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