Eskom’s Stand-Alone Credit Rating Cut Deeper Into Junk at Fitch

Eskom Holdings SOC Ltd.’s stand-alone credit profile was downgraded one notch at Fitch Ratings, signaling the South African power utility’s deteriorating ability to repay debt without additional government support, Bloomberg News reported. Weakening revenue growth, profit-margin compression because of lower tariff increases, and higher primary energy costs were cited by Fitch as among the reasons for the reduction. Eskom’s poor liquidity and high debt levels are the worst among its peers, which includes Namibia Power Corp., Fitch said in a statement on Monday. Fitch assessed the government’s support for Eskom as inconsistent, and said this has led to an unsustainable financial profile over an extended period of time. Read more