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Johannesburg - Following the announcement of the government support plan, Standard & Poor’s (S&P) has affirmed Eskom’s local and foreign currency corporate credit rating at "BBB-", with a negative outlook.
On June 20 2014, the agency placed Eskom on negative credit watch. This has now been removed, Eskom said in a statement issued on Tuesday afternoon.
"S&P believes the government support plan will support the liquidity and credit metrics of Eskom in the near term. It also demonstrates the extremely high likelihood of government support to the utility," said Eskom's finance director Tsholofelo Molefe.
“The affirmation of Eskom’s credit rating and the removal of the credit watch is a very constructive action by the agency. Eskom remains confident that the support from government will stabilise the credit metrics and the liquidity position."
Molefe said it will continue to implement the initiatives identified with the support package from government to improve the financial profile of Eskom and move towards a more stable credit rating environment.
According to Eskom CEO Tshediso Matona Eskom is encouraged by the affirmation of its credit rating by S&P.
"This will greatly assist in achieving financial sustainability of Eskom and to execute its infrastructure investment programme,” said Matona.
