Telkom’s credit rating was downgraded by Moody’s Investors Service, the company said in a statement to shareholders.
This follows South Africa’s credit rating moved deeper into the trash earlier this month.
Telkom said the consequence was Moody’s decision to downgrade.
“Moody’s Investors Service downgraded Telkom’s corporate rating to Ba2 from Ba1 with a negative outlook,” Telkom said.
“The downgrade is a direct consequence of the rating action taken by Moody’s on November 20, 2020, with the goal of lowering South Africa’s state rating by one notch on Ba2 with a negative outlook.”
“Telcom’s business and revenues are concentrated in South Africa, resulting in its credit rating being highly correlated with the country’s economic environment,” the company said.
Despite falling to an older level, 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.
Disposal of Telkom CEO shares
This downgrade follows after Revealed by Telkom that CEO Sipho Maseko sold over 6.2 million RK shares of Telkom.
The disposition is published on the JSE Stock Exchange Service, as required by sections 3.63 to 3.65 of the JSE listing request.
Maseko sold 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 determination of options in terms of the company’s share scheme.
“These transactions were performed on the market. The work permit was received in terms of paragraph 3.66 of the Request for Inclusion, ”Telkom said.
Shortly after Masek, Telkom CFO Tsholofelo Molefe sold 82,569 shares worth R2.759 million.