S&P Global Ratings has downgraded the credit rating for Eskom on Wednesday from B- to CCC+.

According to a report by Reuters, the global ratings agency took the decision as a result of liquidity concerns and insufficient government support that could trigger a default.

“Eskom remains at risk of facing a distressed exchange situation or default in the next six months despite securing R30 billion in short-term funding from local and international funders so far this year,” the agency said in a statement.

The downgrade comes only days after newly elected President Cyril Ramaphosa announced changes to the National Executive in an effort to ensure that government was better equipped to implement the mandate of this administration and specifically the tasks identified in the State of the Nation Address.

One of the tasks identified was for government to stabilise and revitalise state owned enterprises. The president said recent action taken by government at Eskom to strengthen governance, root out corruption and restore the utility’s financial position was just the beginning.

He added that government would take further measures to ensure that all state owned companies fulfil their economic and developmental mandates.