[miningmx.com] – THE electricity crisis in South Africa deepened after credit rating agency, Standard & Poor’s, slapped power utility, Eskom, with a junk rating as a result of the power vacuum following the suspension of its executives.
Eskom last week suspended its CEO, Tshediso Matona, and three other executives, after calling an inquiry, the scope of which is still vague. Standard & Poor’s said the suspensions gave it less confidence in Eskom’s corporate governance and credit profile.
Eskom ’s government-backed debt has now been accorded a BB+ rating, the first level in the agency’s junk, or speculative debt ratings, in which major funds are prohibited from investing clients’ monies, thereby limiting the pool of lenders and making debt more expensive, said BDLive in its report.
In a separate development, Eskom said on Thursday it was without 28% of its capacity and had no reserve margin to meet extra demand. The international norm is for electricity firms to have a 15% spare margin, reported BDLive.
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