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Moody's downgrades Eskom
Eskom Holdings SOC Limited
JSE Code: BIESKM
Date 29 March 2018
MEDIA STATEMENT
Eskom comments on Moody’s downgrade
Thursday, 29 March 2018: Moody’s Investor Services (Moody’s) has downgraded to ‘B2
from B1’ Eskom’s long-term corporate family rating (CFR). The zero coupon eurobonds
rating has similarly been revised to ‘B2’ from ‘B1’ in line with the CFR and the global medium
term note (GMTN) programme and the senior unsecured GMTNs of Eskom were also
downgraded to ‘(P)B3/B3 from (P)B2/B2’. The outlook is negative.
While the downgrade is disappointing, it is worth noting that in its decision, Moody’s
acknowledges the positive strides that the new Board and the new Interim Group Chief
Executive have made in the two-month period that they have led the organisation.
The three issues of concern raised by the rating agency centre around the inadequate tariff
increases in the face of flat demand, no tangible government support and a lack of a resilient
business strategy that will ensure Eskom’s sustainability.
The new Eskom Board is investing a considerable amount of time in formulating a
comprehensive long-term strategy and plan that will place Eskom’s business on a firmer
footing. We are confident that the execution of the turnaround strategy will be accompanied
by positive gains.
Eskom’s Interim Group Chief Executive, Phakamani Hadebe said: “While we are
disappointed with Moody’s decision at this stage, the future looks promising. We have
addressed the liquidity issue and other key challenges. The new Board and Eskom
leadership are swiftly moving into the second intervention stage by formulating an integrated
strategy that will yield favourable results. The positive sentiments expressed by Moody’s
encourage us to work even harder to ensure the execution of this strategy. I am confident
that we will stabilise the credit profile of Eskom and improve its credit rating.”
ENDS
Issued by: Eskom Media Desk
Tel: +27 11 800 3304/3343/3378
Cell: +27 82 805 7278 Fax: 086 664 7699
Email: mediadesk@eskom.co.za
Date: 29/03/2018 09:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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