State-owned Alexkor mine running out of cash

Parliament has heard that state diamond mining company Alexkor will run out of cash in June. The coronavirus pandemic has placed  the spotlight on already struggling company and State-Owned Enterprises.

The former administrator of the state owned entity, Lloyd McPatie,  says he has recommended to government that Alexkor as well as the Pooling and  Sharing Joint Venture be liquidated.

Alexkor also owns property in Alexander Bay, which it maintains at a cost of R7.5 million per year while it only collects rent of R3.5  million from tenants. It also pays R6 million  for water and electricity, which it does not recover from tenants.

McPatie says the partnerships the company has entered into have not helped it get out of financial problems.

” I propose as a department that we need to look at liquidation of Alexkor because the company is not a going concern and it cannot generate cash flows to trade itself out of the current situation. And in terms of the Section 22 of the Companies Act, the company is trading recklessly because it can not meet its financial obligations for the next 12 months. The PSJV itself is technically in solvent. “

In the video below, Alexkor might have to retrench all staff members:

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Various other state-owned entities are fighting for survival as years of poor governance have sucked their financial coffers dry.

Last week, the Department of Public Enterprises said the coronavirus outbreak has put further strain on the companies.