Eskom suffered another blow on Friday as global ratings agency Moody's downgraded the power utility's long-term corporate family rating (CFR).
Moody's attributed the deterioration in the parastatal's financial and liquidity position -- with no clear cash injection from government on the horizon -- as the main reason for the downgrade from B1 to Ba3 status.
Eskom would need to secure access to local and international debt markets if it is to meet its liquidity needs, Moody's said.
Steps recently announced by Deputy President Ramaphosa to turn around the fortunes of the power utility, including replacing its board, are nevertheless anticipated to assist Eskom in securing funding to address its liquidity crisis.
Ramaphosa on January 20 directed Eskom to remove top employees accused of corruption, including Eskom's head of generation Matshela Koko and suspended Eskom CFO Anoj Singh.
While Singh submitted his resignation the evening before he appeared before Parliament's inquiry into state capture at Eskom, Koko has fought back. On Friday he rejected the instruction to resign within 24 hours or be axed and approached the Labour Court to retain his position, Fin24 reported.
Confident of a turn-around
In a statement on Friday, Eskom said it noted the Moody's decision but remains "resolute in [its] endeavours to progressively turn this company around".
"The liquidity concerns raised by Moody's are starting to dissipate as we are already seeing investors and lenders revive their engagements and commitment to Eskom," it said.
Eskom's Acting Chief Financial Officer Calib Cassim said the utility is "acutely aware" of the challenges, but that it is confident it's "on the verge of restoring a positive market sentiment" that will enable it to find funding.
"We see this action by Moody's as a low point in the credit profile of Eskom and we are confident that we are on a path to recovery; supported by the new Board, the governance and leadership at Eskom is being stabilised to bolster the turnaround of the company," the statement said.