Eskom suffers further downgrades
Two of the three big credit ratings agencies, Moody’s and Standards & Poor's (S&P), have downgraded battling power utility Eskom.
S&P says Eskom’s negative credit outlook is in part due to uncertainty about government’s commitment and ability to provide support to the power utility over the coming six months.
Moody’s says its decision is based on the companies deteriorating liquidity as well corporate governance violations.
Eskom has been caught up in allegations of state capture and is currently the subject of a parliamentary enquiry.
Spokesperson Khulu Phasiwe says the utility is working on the issues raised by the agencies.
“The board has instituted some disciplinary actions against some of the management who have been cited in these violations. We are also undergoing a parliamentary process that is trying to get to the bottom of this.
"The Minister of Public Enterprises (Lynne Brown) and cabinet will soon make an announcement about when exactly they will appoint a new board. Hopefully all these measures will help us stabilise the company especially at board and management level.”
Phasiwe says the corporate governance issues are the main reason why Eskom is battling to raise funds.
“The fact of not being able to raise money is based primarily on the fact that we are now having challenges with corporate governance, so corporate governance is the key to Eskom getting back to a good financial footing.”