Moody’s has cited Eskom’s deteriorating liquidity and government’s inability to provide direct equity support for the power utility as its reason for downgrading Eskom.
However, the rating agency is quick to point out that the current developments including the appointment of a new board, could play an important role in a later review of Eskom’s credit rating.
The downgrade from Ba3 the B1, comes after Finance Minister Malusi Gigaba’s admission that Eskom’s liquidity crisis would worsen the power utility’s leadership problems if it’s not urgently resolved.
Meanwhile, Eskom says its head of generation, Matshela Koko has to be removed from the power utility because the serious allegations against him are hampering investor confidence in Eskom.
On Friday, Koko approached the Labour Court in Johannesburg to seek an interdict to prevent Eskom from removing him from his post.
The court issued an interim order stopping Eskom from firing Koko.
This comes after Eskom issued Koko and other executives with an ultimatum to either resign or be fired over corruption allegations. Three executives who were on suspension resigned this week.
