Rating agency Moody’s has downgraded Eskom earlier on Wednesday citing the power utility’s financial and liquidity woes and poor governance.
Moody’s downgraded Eskom’s long-term corporate family rating and placed the power utility on review for a further downgrade.
This means that Eskom will find increasingly difficult to get funding and if it does, it will have to borrow at a higher interest rate.
S&P Global Ratings lowered the ratings of Eskom, with a negative outlook in April 2017.
“Moody’s says its rating action on Eskom reflects its view that the stand-alone credit strength of the company has weakened as a result of its deteriorating liquidity position and poor corporate governance. Eskom has R1.2 billion of liquidity reserves left. The power utility has also been dodged with corruption and state capture allegations.”
Listen to Eskom spokesperson Kulu Pasiwe below: