Nampak’s Andre de Ruyter appointed as Eskom CEO

De Ruyter will start his role at Eskom on January 15, 2020.
Andre de Ruyter will leave his post as Nampak CEO to take up the role as Eskom's new CEO. Image: Moneyweb

South Africa appointed Andre de Ruyter as chief executive officer of Eskom, the debt-strapped utility that provides about 95% of the nation’s electricity and poses the biggest threat to its economy.

De Ruyter, currently CEO of packaging firm Nampak, will take up the post on January 15, the Department of Public Enterprises said in a statement. The state-owned power company has been looking for a new CEO since Phakamani Hadebe in July became the 10th person to vacate the post in as many years.

De Ruyter takes the helm at Eskom in what is the most critical period since its establishment in 1923. The loss-making utility has R450 billion of debt and is struggling to fix ageing power stations and correct defects in new ones. Saving the business is a key goal of the government, which is sustaining it with R138 billion of bailouts over the next three years alone.

“I would like to thank Mr. De Ruyter for not only accepting this position at a difficult time for Eskom, but, given Eskom’s current financial situation, also agreeing to a lower compensation package than the position currently pays,” the department said Monday in a statement.

The government had shortlisted three candidates for the position of CEO, including former LNG Canada CEO Andy Calitz and Jacob Maroga, who was Eskom CEO from 2007 to 2009. Meida speculation about who the third person was didn’t include De Ruyter.

The rand pared a decline after the announcement, while Eskom’s dollar bonds were little changed.

“Neutral in my books,” said Jones Gondo, a credit research analyst at Nedbank in Johannesburg. “The market is going to have to know him better and understand what qualities he is going to bring to the table. The market had not anticipated him to be one of the slated candidates.“

Public Enterprises Minister Pravin Gordhan has unveiled plans to split Eskom into generation, transmission and distribution units by the end of 2021, a reorganisation he says will enable the businesses to manage costs more effectively and make it easier for them to raise funding. A policy paper released last month also envisions the utility being exposed to greater competition, lowering its fuel costs and increasing its renewable-energy output.

In addition to his role at Nampak, De Ruyter spent more than two decades at petrochemical giant Sasol Ltd. in a number of senior management roles. He’s overseen work in the US, Germany, China and African nations including Nigeria and Angola, the department said.

A chief restructuring officer has been appointed to consider how to reorganise Eskom’s debt, but the government has yet to reveal its preferred option. Finance Minister Tito Mboweni has said debt relief will only be considered after the utility shows progress in improving cash flow management and operations, setting up the three units and ensuring they are run within their means.

While the Treasury suggested that Eskom could settle its entire debt by selling some of its plants, President Cyril Ramaphosa said the utility’s new plants are its “crown jewels” and should be retained, while it would be difficult to find buyers for the older ones.

The CEO will need to work in concert with the presidency and a swath of teams, ministries and consultants charged with rescuing Eskom, which isn’t selling enough power to cover its costs and posted a record R20.7 billion loss in the year through March. Labour unions, which represent the bulk of the utility’s 46 665 workers, oppose a breakup of the business and plant sales because they see them as a precursor to job losses.

© 2019 Bloomberg L.P.

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He is a brave man to accept this poisoned chalice.

The EFF has since proclaimed in the media that this appointment is racist.
They are absolutely correct in the fact that he is being paid far less than his unsuccessful predecessors is absolutely racist!!!

Good luck Sir. This is a big job.

I hope the cadres butt out.

Hope he has his cyanide pill ready for the suicide mission !!! – Bet get your will in order !!

Good luck boet. You will need it.

Don’t forget to take a for sale sign with on your first day.

A good start : Not another BEE Deployee !!!

Since he joined Nampak the share price lost 75% of its value…from R40 to under R8.

Good luck…

Lamb to the slaughter.

No Comment at this stage. I will sit on my hands. But I reserve the right to comment later.

I’ll reserve my as well. Quite a wildcard here.. let’s see how it goes.

Weird appointment : the Company probably needs a legal financial engineering expert. Rare find

Andy Calitz would have fitted your requirements like a glove – wonder why he didn’t get it in the end….

Nog a ” ja broer”

Give the man a full glass. His first job (under a unassailable mandate) must be to pick his own team. Beyond that the politicos must stay out of the way.

The stand (or the lack of a stand) that Govt takes now re SAA will dictate how all other SOE restructuring goes. Even the most brilliant Head with an ideal team will stand powerless and be doomed to fail if Govt do not do what is right.

Not so subtle admission, finally by ANC that its ‘deployed, disciplined cadres’ are everything but useful in these posts. What took so long to hire right skilled people? Now all government needs to do is ‘get out of the way.’ Unions also need to take a haircut if the CEO starts with one. Goei geluk – goodluck and Godspeed to Mr De Ruyter.

Unless the ANC stop with their political interference and kick the unions in their teeth, Andre de Ruyter have absolutely ZERO chance of success.

Ifcyouvtake on a job at which you can never succeed, who can blame you for failing?

After starting with a salary cut, I hope he implements the same salary cut across the board and all staff.

Don’t know this guy but the market is voting and sees no colour. Nampak almost in rescue and Eskom bond yields at record highs.

Sasol stint was during an energy bull market. Rising tide-man…

With him in charge, Nampak shares lost more than 80% of their value during the last 5 years, en more than 50% in the last year alone. Now he as CEO is jumping ship and jumping into Eskom.

Are we sure this is the best guy to be in charge of Eskom, and in effect the country’s energy supply? I mean he basically destroyed Nampak?

End of comments.

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