Telkom’s credit rating has been downgraded by Moody’s Investors Service, the company announced in a statement to shareholders.
This follows after South Africa’s credit rating moved deeper into junk earlier this month.
Telkom said the Moody’s decision to downgrade its rating was a consequence of this.
“Moody’s Investors Service has downgraded Telkom’s corporate family rating to Ba2 from Ba1 with a negative outlook,” Telkom said.
“The rating downgrade is a direct consequence of the rating action Moody’s took on 20 November 2020, to downgrade the South African sovereign rating by one notch to Ba2 with a negative outlook.”
“Telkom’s operations and revenues are concentrated in South Africa, and as a result, its credit rating is highly correlated to the country’s economic environment,” the company said.
Despite the downgrade, Moody’s acknowledged Telkom’s relatively strong credit performance and liquidity.
“Moody’s notes the company’s strong credit metrics and good liquidity and will monitor Telkom’s performance given the prevailing economic conditions,” Telkom said.
Telkom CEO share disposal
This credit rating downgrade follows after Telkom disclosed that CEO Sipho Maseko sold over R6.2-million worth of Telkom shares.
The disposal was announced on the JSE’s Stock Exchange News Service as is required by sections 3.63 to 3.65 of the JSE’s Listing Requirements document.
Maseko disposed of 87,505 shares at an average price of R32.62 on 12 November 2020, as well as 104,500 shares at an average price of R32.73 on 13 November 2020.
These two disposals total R6,274,552.05, and followed the vesting of options in terms of the company’s share scheme.
“The above transactions were done on market. Clearance to deal was received in terms of paragraph 3.66 of the Listings Requirements,” said Telkom.
Shortly after Maseko, Telkom CFO Tsholofelo Molefe sold 82,569 shares to the value of R2.759 million.
Now read: Telkom reveals Black Friday sale
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