Bulletin: ESKOM Holdings Rating Not Immediately Affected By Supply Issues And Proposed Plan

JOHANNESBURG (S&P Global Ratings) Dec. 10, 2018--S&P Global Ratings today said its ratings on South Africa-based utility ESKOM Holdings SOC Ltd. (CCC+/Negative/--) are not immediately affected by recent news on the company's acute operational and power supply challenges, or management's communication of its proposed strategic plan--which includes cost-cutting, tariffs sufficient to cover costs, and government assistance with deleveraging--given that the plan is still subject to shareholder review and approval. Our current rating on ESKOM incorporates our view that the company remains at risk of not securing sufficient liquidity to meet all funding requirements in the next six months. Additionally, our rating assessment takes into consideration that although we believe that ESKOM will benefit from some government support, we consider that

...JOHANNESBURG (S&P Global Ratings) Dec. 10, 2018--S&P Global Ratings today said its ratings on South Africa-based utility ESKOM Holdings SOC Ltd. (###+/Negative/--) are not immediately affected by recent news on the company's acute operational and power supply challenges, or management's communication of its proposed strategic plan--which includes cost-cutting, tariffs sufficient to cover costs, and government assistance with deleveraging--given that the plan is still subject to shareholder review and approval. Our current rating on ESKOM incorporates our view that the company remains at risk of not securing sufficient liquidity to meet all funding requirements in the next six months. Additionally, our rating assessment takes into consideration that although we believe that ESKOM will benefit from some government support, we consider that the predictability and timeliness of such support has been insufficient, given the acuteness of Eskom's ongoing funding challenges (see "South Africa-Based...

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