Eskom 'dissappointed' as Moody's cuts its unsecured debt further into junk

Power utility Eskom is disappointed by the further downgrading of its unsecured debt by ratings agency Moody's.to leave SA's long-term foreign-currency and local-currency issuer rating at Baa3, the last rung of investment grade.

Moody's did, however, change the outlook for Eskom's credit rating from"stable" to"negative". While Eskom's government-guaranteed debt remained unchanged at Baa3 – in line with SA's sovereign debt - its unsecured debt is another matter.it had downgraded to B3 from B2 the long-term corporate family rating of Eskom. B3 is the sixth rung of non-investment grade, according to Moody's ratings hierarchy.

Eskom, in a statement, said its current board and management had"worked painstakingly hard to try and resolve corporate governance issues of the past regime". It added it was cautiously confident its debt obligations are not at risk. "Whichever option gets implemented through the unbundling processes, we will ensure that our creditors will not be compromised and that the execution of these options gets done under acceptable legal frameworks," said Eskom's acting group chief executive and interim executive chair Jabu Mabuza."Our electricity supply system remains fairly constraint, but we are doing everything we can to make sure that the supply is not compromised.

In its rating assessment Moody's said that, while it noted the SA government's commitment to provide financial support to Eskom, the power utility was facing a raft of challenges. These include very high indebtedness, limited revenue growth, poor plant performance, an ageing fleet and a history of weak corporate governance.

Happens when economic principles are ignored

Disappointed I'm sure 🤔🤨

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Eskom is single-handedly obstructing SA’s desperately needed growthEskom is obstructing SA’s desperately needed growth. It is making a tripartite demand – to government to spend money it does not have; to households to pay more for less electricity; and to businesses to pay more for producing less, writes Jason Musyoka 🙄😴 There arebno strategies that can ever fix issues of Eskom & all other SOE's except holding people who looted Eskom accountabl, sell all their assets and return the tax payers money to where it belongs. Another that they'll keep on singing the same song & lying to us. jasonmusyoka has zero knowledge of Energy or Eskom... almost as bad as hawiknowledge1. energyexperts fakenews
Source: City_Press - 🏆 7. / 72 Read more »