SA's electricity crisis | Power cuts hit companies hard

JOHANNESBURG - Persistent blackouts and impending 18.65 percent electricity tariff hikes point to ‘inevitable’ financial distress for businesses.

That’s according to Werksmans’ Insolvency and Business Practice Group Director, Eric Levenstein.

READ: SA's electricity crisis | Businesses taking a knock

He says a lot of companies are now operating at a loss due to power cuts.

“You look at last year, a lot of companies that were already on the cusp of insolvency couldn’t hang on much longer and filed for insolvency or liquidation.

READ: SA Energy Crisis Committee expects power cuts to ease

"And I think on the back of the recent Eskom tariff hike, we could potentially see more failures in the first quarter of this year," Levenstein said.

"It’s not looking great in respect of companies being able to sustain a continued loss of revenue now, coupled with an 18.65 percent Eskom tariff hike.

"It’s not looking easy for companies to continue to trade where they are in the cast of financial distress,” he said.