Moody’s Investor Services has downgraded Eskom ratings, disappointing the “fix-it” team recently deployed to the electricity utility.
“The company’s liquidity levels remain at low levels; we have, however, seen a considerable amount of support for Eskom paper from the local markets and coupled with the financial support announced by government, we are cautiously confident that our debt obligations are not at risk.”
Eskom’s acting group CEO and interim executive chairperson, Jabu Mabuza, said: “We acknowledge the concerns expressed by Moody’s and continue to work closely with shareholder ministries to resolve the current challenges. “Whichever option gets implemented through the unbundling processes, we will ensure that our creditors will not be compromised and that the execution of these options gets done under acceptable legal frameworks. Our electricity supply system remains fairly constrained; but we are doing everything we can to make sure that the supply is not compromised.”
Moody's also downgraded the country's rating outlook on Friday, from “stable” to “negative”, which commentators said was a signal to government to take much stronger action to get debt under control, cut spending and address low economic growth. On Tuesday, Eskom cautioned that the country's electricity system was “severely constrained” and it was relying on emergency resources — diesel and pumped water storage — to keep the lights on.
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