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Cape Town - Eskom on Monday said investors and lenders are reviving their commitments to the state power utility and it is “on the path to recovery”.
Eskom was responding to Friday’s announcement by global ratings agency Moody’s of a further downgrade of its long-term corporate family credit rating from B1 from Ba3.
A 'B1' rating indicates a "highly speculative" debt position. It is the fourth rung of non-investment grade, or junk debt.
“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,” said Eskom in a media release on Monday.
The state-owned enterprise has been facing acute liquidity shortages.
As Fin24 previously reported, National Treasury has issued R350bn in government guarantees to the national power utility, of which R275bn has already been used.
Energy regulator Nersa, meanwhile, last year rejected Eskom’s plea for a tariff hike of 20%, granting it a 5.2% increase instead.
'Low point'
Eskom on Monday said it saw the rating action by Moody’s, one of the big three major ratings agencies, as a “low point” in its credit profile.
“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,” it said.
Eskom’s new board was announced on Saturday January 20 by Deputy President Cyril Ramaphosa, the day before he left for Switzerland to lead a delegation of South African business leaders and politicians to the annual meeting of the World Economic Forum in Davos.
The national power utility’s acting chief financial officer, Calib Cassim, said it is “cautiously enthusiastic” that it will improve its liquidity position and financial profile.
"We are acutely aware of the challenges that Eskom is confronted with; however, we are confident that we are on the verge of restoring a positive market sentiment that will assist with the execution of our funding plan," he said.
Eskom is set to publish its financial results on Tuesday.
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