Eskom has shelved plans to ask the Public Investment Corporation (PIC) to convert some of its debt to equity, Eskom chairperson Jabu Mabuza told MPs on Tuesday.
"We are not asking anybody to convert debt," he told a joint meeting of the portfolio committees on energy and public enterprises
Mabuza said the reason for this was that the company realised it might send an alarm signal to other creditors.
"We have since become aware that it might not be a good idea because it might trigger covenants that we have with some lenders."
Eskom floated the idea earlier this year of asking the PIC to convert some of the R84-billion it holds in Eskom bonds into shareholding in the company.
But Mabuza said it sent a clear message to investors on recent roadshows to London and New York that it was not going to ask bond holders to convert debt into equity.
"To ask a bondholder to forgo a coupon in lieu of a dividend in a company making losses would be asking a creditor to compromise,” he said.
Eskom has debt of R388-billion and is unable to service its debt costs from its revenue.
But Mabuza stressed that it was not defaulting on any of its debt.
"We are making payments and all things being equal we should be able to pay our debt."
Eskom is due to submit a new strategic plan at the end of September.
Mabuza said the company needed to focus on improving revenue and cutting costs, adding that there "is little we can do about our balance sheet".
He said he was taking a philosophical view that Eskom's agreement to pay seven percent wage increases over the next three years had bought the company stability for that period after strikes prompted load-shedding this winter. But he added that the company needed to look at its bloated staff complement to ensure that it had the right skills for the future.
"I don't know whether we will be downsizing but we are determined to right-size."