S&P Global Ratings has downgraded the credit rating for state-run power utility Eskom to CCC+ from B- on Wednesday.
Citing liquidity concerns and insufficient government support that could trigger a default, this is the third rating downgrade for the power utility since late last year when it received a double-downgrade at the beginning of the State Capture investigation saga.
"Eskom remains at risk of facing a distressed exchange situation or default in the next six months despite securing 30 billion rand ($2.56 billion) in short-term funding from local and international funders so far this year," the agency said in a statement.
The utility could face default in the next 6 months.
Ousted Public Enterprises Minister, Lynne Brown, has largely been seen as the enforcer in this situation as she was found to have turned a blind-eye towards questionable practices.
Bad-management doesn’t begin to cut it, according to new Public Enterprises Minister, Pravin Gordhan.
One of the welcome changes to cabinet, Gordhan will be tasked with the mammoth endeavour of resuscitating many of the nation’s State-Owned Enterprises (SOEs), first and foremost Eskom.
As stipulated by new Finance Minister, Nhlanhla Nene, the budget in itself and the changes to cabinet are symbolic changes. However, they will not be enough to save South Africa from further downgrades and economic turmoil.
Nene and Gordhan will be pivotal in pushing for reform and implementing proper changes to spear-head growth and development.
The time to roll-up the sleeves is now.