Eskom downgrade is of grave concern

Eskom’s downgrade to junk status by Standard and Poor’s is of “grave concern”, the SA Chamber of Commerce and Industry (Sacci) said on Friday.

“The potential for the enterprise to raise the additional R50 billion that it requires, in addition to the original plan to raise R200 billion at a reasonable interest rate, is significantly reduced by this downgrade,” Sacci said in a statement.

Despite National Treasury’s promised R20 billion injection, Eskom still faced considerable challenges.

Ratings agencies Moody’s and Fitch currently had Eskom on a negative rating.

On Thursday, S&P downgraded Eskom’s long-term credit rating to BB+, from BBB-, following the suspension of four of its senior officials.

Last week, Eskom chief executive Tshediso Matona, finance director Tsholofelo Molefe, group capital executive Dan Morokane, and commercial and technology executive Matshela Koko were asked to step aside as the power utility embarked on a fact-finding inquiry.

In recent months, Eskom has battled to keep the lights on since the collapse of one of its coal storage silos, diesel shortages, and maintenance issues.

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Eskom downgrade is of grave concern