State-owned Airports Company South Africa (Acsa) has stated that it “notes” the recent decision by ratings agency Moody’s Investors Service to downgrade Acsa’s ratings and to change its outlook for the airports operator from “under review” to negative. Acsa, however, has also reported success in securing funding and strengthening its liquidity.
Moody’s downgraded Acsa’s corporate family rating from Ba1 to Ba2. It also downgraded Acsa’s national scale rating from Aa2 to Aa3. These downgrades followed a review of the airports company by the ratings agency, which the latter started on March 31.
“Moody’s stated that the downgrade takes account of Acsa’s rising credit and liquidity risks due to the sharp decline in traffic as a result of the implementation of travel restrictions,” reported Acsa. “Moody’s further stated that the rapid spread of the coronavirus outbreak, severe global economic shock, low oil prices, and asset price volatility are creating a severe and extensive credit shock across many sectors, regions, and markets.”
The airports company pointed out that it had already informed its key stakeholders of the severe effect on its finances of the air travel bans imposed by many countries around the world, to try and counter the Covid-19 pandemic. Worldwide, airports have been particularly severely hit by these measures.
Acsa had consequently revised its financial plan, on the assumptions that there would be a long-term reduction in air passenger traffic. The company’s responses included substantial cuts in operational expenditure and limiting capital expenditure.
“Airports Company South Africa has in recent days made important progress in implementing plans to secure funding and to ensure its immediate sustainability,” it assured. “The company received approval from its key lender, L’Agence Française de Developpement, to waive its right to call a default in respect of the in-compliance with projected ratios until 30 June 2022, given the extraordinary context of Covid-19.”
Acsa has also gained approval for both an extension and an increase of its banking facilities to R3-billion (from the previous R1.5-billion) over a period of 12 months. “The available liquidity will be adequate given low levels of debt maturities of R296-million in the next 12 months,” it stated.