(Bloomberg) — Andre de Ruyter quit as chief executive officer of Eskom Holdings SOC Ltd., leaving the South African state power utility facing a potential leadership vacuum as it struggles to tackle record blackouts and awaits government support to reduce its massive debt burden.
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De Ruyter will remain in his role until March 31 and a comprehensive search will be conducted to find a suitable successor, Eskom Chairman Mpho Makwana said in a statement on Wednesday. Two heads of the company’s flailing generation division have quit this year, while Chief Operating Officer Jan Oberholzer is set to retire in April.
“It has been an honor and a privilege to serve Eskom and South Africa,” De Ruyter said in the statement.
The rand gave up some gains after De Ruyter’s decision to go was first reported and was 0.6% stronger at 17.1693 rand per dollar by 6:23 p.m. local time. Yields on the company’s dollar debt due 2025 climbed 4 basis points to 11.3%.
De Ruyter, a former CEO of packaging company Nampak Ltd., became Eskom’s 13th CEO in a decade almost three years ago. He sought to get the utility to produce more green energy as its old coal-burning plants are taken offline and he challenged tariff decisions made by the energy regulator, saying the company needed to charge more to cover its costs.
Read more: Why Blackouts Are Still Crippling South Africa: QuickTake
While his appointment and attempts to clean up a utility that became synonymous with corruption during former President Jacob Zuma’s presidency were viewed as positive by the market, he struggled to turn its finances and performance around.
He also ran into political opposition, especially from Mineral Resources and Energy Minister Gwede Mantashe who said he was unsuited for the job. Africa’s most-industrialized economy has been subjected to a record 188 days of power outages this year, mainly due to unexpected breakdowns at Eskom’s plants.
“While this is a blow, it is hardly surprising, given the irresponsible comments by some in government and some other sectors,” Cas Coovadia, the CEO of lobby group Business Unity South Africa said in a statement. “The Eskom board must act with urgency to announce a replacement” who has the capability to reduce power cuts, accelerate Eskom’s restructuring, tackle ongoing corruption and sabotage and diversify energy generation, he said.
Read more: South Africa Rules Out Asking Eskom Bondholders to Take Haircuts
The National Treasury said in October’s budget update that the government may shift between one-third and two-thirds of the power company’s debt of about 400 billion rand ($23 billion) onto its own balance sheet. Details including the amount and terms of the transfer are expected to be announced in February’s budget.
All Eskom programs will continue because business continuity was of primary importance, said Public Enterprises Minister Pravin Gordhan, who oversees the utility. “Andre has carried an enormous burden on behalf of South Africa. I want to thank him for his sacrifice and resilience in a difficult job.”
–With assistance from Monique Vanek, Colleen Goko, Loni Prinsloo, Thomas Hall, Rene Vollgraaff and Paul Vecchiatto.
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