PARLIAMENT, February 20  – Finance Minister Tito Mboweni on Wednesday described the National Treasury's talks with international ratings agencies on the eve of his first budget as "very difficult".

"Treasury officials had very, very difficult conversations with the ratings agencies," he told a media briefing about two hours before he tabled the budget.

"They were almost saying you are damned if you do and damned if you don't," he added, referring to the complex balancing act the finance ministry faced on shoring up struggling power utility Eskom.

Mboweni opted to allocate R23 billion to Eskom annually for three years to help cover its debt payments.

He said this support would go hand in hand with splitting the company into three units, under the supervision of a chief reconfiguration officer to be appointed in coming weeks by himself and Public Enterprises Minister Pravin Gordhan.

Mboweni said the treasury would "continue the conversation" with the ratings agencies.

Moody's, the only one of the big three major international ratings agencies to have maintained South Africa's debt at investment grade, warned last week that unbundling Eskom alone would not persuade it not to downgrade the country's credit rating.

African News Agency (ANA)