- Standard & Poor’s has announced its decision to revise their outlook on Eskom to stable from negative.
- The rating agency has also affirmed the company’s foreign and local currency long-term credit ratings of ‘CCC+’; and the long and short-term national scale ratings of ‘zaB’ and ‘zaB’.
The rating agency’s decision follows the announcement made by the Minister of Finance Mr Tito Mboweni in his national budget speech on 21 February 2019 where he indicated that government will extend a provisional support package to Eskom, totalling R69 billion over a three year period to 2022. The support package is expected to enable Eskom to meet its debt service obligations.
Eskom has to date secured 95% of its R72 billion funding requirement for FY18/19 and 35% of the company’s indicative R48 billion funding requirement for FY19/20. The company remains cautiously optimistic that they will secure the full funding requirement for this year owing to improved market sentiment on Eskom.
Eskom’s Chief Financial Officer, Calib Cassim said: “We are encouraged by the rating agency’s decision to positively revise their outlook on Eskom and affirm the credit ratings. We view this decision as a positive reinforcement of the strides that we have made to improve Eskom’s liquidity position. The moderately improved liquidity will allow us the flexibility to focus on continuing to secure the funding required for the FY19/20 and stabilise Eskom’s security of supply.”
Author: Bryan Groenendaal