Eskom notes the decision by Standard and Poor’s Global Ratings (S&P) to downgrade Eskom’s long-term foreign and local currency corporate credit rating to ‘CCC+’ from ‘B-’; outlook remains negative.
The review of Eskom’s credit rating is largely based on S&P’s assessment of the assumed likelihood of sufficient and timeous government support for Eskom from ‘very high’ to ‘high’; this, given the company’s current liquidity challenges.
“Eskom notes the decision by S&P to downgrade the credit rating as largely based on the strain on our liquidity levels. We have been and continue to be in extensive engagements with key stakeholders to resolve Eskom’s current governance related and liquidity issues. Further, we have demonstrated visible actions that have been implemented to turn this company around. We are comfortable that government has provided Eskom with tangible support to ensure that Eskom’s governance related and liquidity challenges are expediently resolved,” said Phakamani Hadebe, Eskom Interim Group Chief Executive Ofiicer.
“The timing of the downgrade is unfortunate as we believe that we are starting to see slight improvements in markets sentiments. We will continue to engage with the rating agencies and various key stakeholders on the implementation and progress of the turnaround strategy with the ultimate goal of providing enough comfort to investors that we are on a path to stabilizing Eskom’s operational and financial profile,” said Calib Cassim, Eskom Acting Chief Financial Officer.