Johannesburg - State power utility Eskom urgently needs a turnaround plan as its capital structure is unsustainable, credit ratings agency Moody's said on Tuesday in a report which sent the rand to a two-month low.
A week ago Eskom reported a mammoth R20.7 rand annual loss, and its outgoing chief executive said the firm needs to change its outdated business model to escape a "death spiral".
"The company's operational and financial performance has deteriorated, indicating the extent of the challenges facing Eskom in meeting its debt obligations absent government support," Moody's said in a note.
"The current capital structure is not sustainable... indicating a strong and urgent need for a longer term strategic turnaround plan."
The rand gave up its gains against the dollar and sharply reversed course after the report was published to hit its lowest since June 7. It traded down 0.4% at 14.9725 rand per dollar by 1519 GMT.