S&P downgrades Eskom’s long-term debt rating following suspensions
RATING agency Standard & Poor’s (S&P) on Thursday downgraded Eskom’s long-term debt rating following management suspensions.Standard & Poor’s said the recent suspension of the company’s CEO and three senior executives had "led us to have less confidence in the company's corporate governance arrangements as well as in its stand-alone credit profile".The agency still assumed there was a "high likelihood" that the power utility would receive "extraordinary state support if needed".S&P lowered its long-term rating on Eskom to BB+ from BBB and its national scale ratings to zaA/zaA-2 from zaAA-/zaA-1.S&P kept its negative outlook on Eskom due to "execution risk" in the government’s support plan, adding that the company’s operating performance was under pressure due to rising costs and "very tight generation capacity margin in SA".
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