Ricochet News

Eskom to engage Moody’s over downgrade

SEPTEMBER 15, 2016
Eskom to engage Moody’s over downgrade

Eskom says it has noted concerns raised by rating agency Moody’s Investor Services to place the electricity utility’s Ba1 senior unsecured and (P)Ba1 senior unsecured medium-term note (MTN) ratings on credit review.

In a statement on Wednesday, the utility said while the decision was unfortunate, it will engage the rating agency.

“The review by Moody’s is unfortunate, given the progress made towards improving the company’s financial profile, successful implementation of the operations turnaround plan and Eskom’s healthy liquidity position.

“We will, however, continue to engage with the rating agency to resolve the concerns that resulted in this decision,” said Eskom’s Chief Financial Officer Anoj Singh.

The rating agency said the review reflects the rising funding challenges faced by Eskom in the context of an adverse regulatory framework and an evolving political environment.

Singh said the utility remains confident that continued engagements with all relevant stakeholders will contribute to a positive outcome for Eskom and the country.