Johannesburg - Fitch Ratings on Wednesday downgraded South Africa's power utility Eskom’s long-term local currency Issuer Default Rating (IDR) and unguaranteed local currency senior unsecured ratings to ‘BB-‘ from of ‘BB+’ and maintained the ratings on Rating Watch Negative (RWN).
The rating agency also affirmed the government-guaranteed local currency senior unsecured debt ratings at ‘BB+’.
In their statement, Fitch cited weakening liquidity of Eskom and the company’s uncertain capacity to fulfil its short-term financial commitments as the underpinning rationale for their decision.
On Tuesday, Eskom released its long-awaited interim results for the six months ending 30 September 2017 which showed that the utility has a level of debt over R300 billion, with its revenue falling by two percent to R96 billion and cash from operating activities dropping 30 percent to R22 billion.
Eskom's liquid assets also declined to R9 billion from R30 billion a year previously. But more worrying was the group's inability at the moment to raise capital as investors are concerned about allegations of corruption against some of its executive.
On Friday, Moody's Credit Rating agency downgraded Eskom's long-term corporate family rating (CFR) from 'Ba3 to B1".
African News Agency/ANA