Headquarters of Eskom, Megawatt park, north of Johannesburg. Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa.
JOHANNESBURG – Ratings agency Moody’s has downgraded Eskom to B1 from Ba3, the parastatal said in a statement on Friday.
The agency said the rating remained under review for further downgrades.
The agency did view the recent interventions, including the appointment of a new board by Deputy President Ramaphosa, as favourable in bolstering the credit quality of Eskom.
Moody’s cited Eskom’s deteriorating liquidity and the inability of government to provide direct equity support to Eskom as concerns.
Eskom’s Acting Chief Financial Officer Calib Cassim said: “We note the decision by Moody’s to downgrade the company’s rating. However, we remain resolute in our endeavours to progressively turn this company around.
“The liquidity concerns raised by Moody’s are starting to dissipate as we are already seeing investors and lenders revive their engagements and commitment to Eskom,” he added.
“We see this action by Moody’s as a low point in the credit profile of Eskom and we are confident that we are on a path to recovery; supported by the new board, the governance and leadership at Eskom is being stabilised to bolster the turnaround of the company.”