Eskom has been boosted following the news that S&P Global Ratings has put the power utility’s debt assessment on positive watch.
This means the ratings agency may upgrade South Africa’s state-owned power utility despite ongoing power cuts in South Africa.
News24 Business reports that the move follows the announcement last month that the embattled power supplier will receive R254 billion in debt relief from the government, the ratings company said in a statement on Tuesday.
“S&P expects the move will address Eskom’s near-term debt obligations once implemented and give Eskom room to focus on operational improvements and electricity-sector reform targets,” reports the publication.
“S&P could raise Eskom’s CCC+ rating by one or more notches based on the expectation that the utility’s liquidity position will strengthen and that the risks of a near-term default event will reduce once the debt relief agreement is implemented.
Meanwhile, Moody’s Investors Service raised its outlook on Eskom ratings to positive for the first time in 15 years after Finance Minister Enoch Godongwana said back in October that the government would take over some of the company’s debt.
Still with the power generator, BusinessTech Africa posted that a R254 billion rand ($14 billion) state bailout for South Africa’s cash-strapped power provider will help stabilise its finances, but it will not instantly enhance its operations or ease the country’s acute electricity shortage.
Eskom Holdings SOC Ltd.’s three-year debt-relief plan, outlined in Finance Minister Enoch Godongwana’s budget address last month, was conditional on the firm bringing in private operators to assist manage its facilities and transmission network, as well as satisfying other performance benchmarks.
