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Johannesburg – Ratings agency Fitch on Wednesday downgraded Eskom’s long-term local currency Issuer Default Rating (IDR) and unguaranteed local currency senior unsecured ratings.
This comes after Eskom’s chief information officer Sean Maritz was placed on permanent suspension earlier on Wednesday.
Fitch cited weakening liquidity and the company’s uncertain capacity to fulfil its short-term financial commitments as rationale for its decision.
Eskom’s interim CEO Phakamani Hadebe said he believed the measures the power utility implemented would be able to turn things around and improve Eskom’s sustainability.
Hadebe was placed in this position, al Telkom chair Jabu Mabuza as chairperson in a broader board overhaul on January 20.
"We take note of the decision by Fitch to downgrade Eskom’s credit rating. We firmly believe that the measures being implemented to turn the company around are yielding the favourable results," Hadebe said.
"We have seen renewed enthusiasm from financial markets to support Eskom’s funding plan and the preliminary engagements with market participants have had positive outcomes," Hadebe said.
"We are cognisant of the challenges that the company is dealing with and we are geared to effectively resolving these challenges and improve Eskom’s operational and financial sustainability in the interest of the South African economy."
Acting Chief Financial Officer Calib Cassim said the power utility was making progress in sorting out Eskom’s financial challenges.
"The next few months will be difficult, but we need to work speedily and with a level of urgency in order to resolve our financial challenge," he said.
"We are making progress in expediently resolving Eskom’s financial challenges; we will also continue engaging the rating agencies and the financial markets to address their concerns and improve investor sentiment and ultimately restore Eskom’s healthy liquidity position."
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