Ratings agency Fitch Ratings has downgraded State-owned power utility Eskom on the back of weakening liquidity and uncertain capacity to fulfil its short-term financial commitments.
The ratings agency downgraded the parastatal’s long-term local currency issuer default rating and unguaranteed local currency senior unsecured ratings from ‘BB+’ to ‘BB-’.
It also maintained the ratings on Rating Watch Negative and affirmed the government-guaranteed local currency senior unsecured debt ratings at ‘BB+’.
“We take note of the decision by Fitch to downgrade Eskom’s credit rating. We firmly believe the measures being implemented to turn the company around are yielding favourable results,” said Eskom interim group CEO Phakamani Hadebe.
“We are cognisant of the challenges the company is dealing with and we are geared to effectively resolving these challenges and improving Eskom’s operational and financial sustainability.”