ESKOM HOLDINGS SOC LIMITED - Eskom's response statement to Fitch Rating's decision

Eskom's response statement to Fitch Rating's decision

Eskom Holdings SOC Limited
JSE Code: BIESKM
Date 03 May 2018

MEDIA STATEMENT

Eskom's response statement to Fitch Rating's decision

Wednesday, 02 May 2018: Fitch Ratings has announced its decision to maintain Eskom
Long-Term Local Currency Issuer Default Rating (IDR) and unguaranteed local currency
senior unsecured ratings of 'BB-'. Fitch has simultaneously maintained the National Long-
Term Rating at 'A(zaf)' and the National Short-Term Rating at ‘F1(zaf)'. The rating agency
has also affirmed the government-guaranteed local currency senior unsecured debt ratings
at 'BB+', in line with the rating of South Africa (BB+/Stable Outlook). Eskom’s credit ratings;
except for the government guaranteed debt, remain on Rating Watch Negative (RWN) as
instituted by Fitch in January 2018.

Eskom views the ratings decisions by Fitch as positive; the rating agency is cognisant of
the positive measures that have been implemented by the new Board and management to
turn the company around in their short tenure at Eskom.

The rating agency does acknowledge that the company has made positive strides in
addressing its liquidity challenges; however, Fitch Ratings maintains that Eskom’s liquidity
challenges remain the main rationale for their RWN position on the company’s rating.
Eskom successfully raised R57 billion from the financial markets for the year ending 31
March 2018; R43 billion of which was raised between January and March 2018.

Eskom is confident that it will successfully execute its R72 billion FY18/19 funding
requirement through various sources including committed Development Finance
Institutions (DFIs), local and international debt capital markets, Export Credit Agencies
(ECAs) and other innovative funding structures. At 31 March 2018, the company had
secured 16% (R11 billion) of this funding requirement.

Eskom has also submitted the R66.6 billion Regulatory Clearing Account (RCA)
applications for 2015, 2016 and 2017 years; the National Energy Regulator (Nersa) public
hearings on these applications are currently underway with the announcement on the
Regulator’s decision expected by 21 June 2018.

Eskom’s Interim Group Chief Executive, Phakamani Hadebe said: “We are encouraged by
Fitch Ratings’ decision to affirm Eskom’s credit ratings and we acknowledge the continuing
Ratings Watch Negative status. To ensure Eskom’s future sustainability the Eskom Board
has embarked on a turnaround business strategy with a core focus on financial viability,
continued strong operational performance and the complete resolution of governance
related challenges. We are reassured by the rating agency’s acknowledgement of the
progress made to date and we are confident that the positive trajectory will continue to a
point where the company attains acceptable operational and financial sustainability”.
  “While we are cognisant of the multiple challenges faced by the company; we remain
  confident that we will successfully execute the FY18/19 funding requirement. The various
  engagements with key financial markets stakeholders have confirmed a renewed local and
  international investor appetite in Eskom. This has also been demonstrated by the tangible
  support received from these stakeholders and their willingness to constructively continue
  engaging Eskom”, said Calib Cassim, Acting Chief Financial Officer.




  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: 03/05/2018 09:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.