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Telkom’s credit rating has been downgraded by Moody’s Investors Service, the company announced in a statement to shareholders.
This follows after the credit rating of South Africa. delved into trash earlier this month.
Telkom said Moody’s decision to downgrade was a consequence of this.
“Moody’s Investors Service has downgraded Telkom’s corporate family to Ba2 from Ba1 with a negative outlook,” Telkom said.
“The downgrade is a direct consequence of the rating action Moody’s took on November 20, 2020, to downgrade South Africa’s sovereign rating 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 with the economic environment of the country,” the company said.
Despite the downgrade, Moody’s acknowledged Telkom’s relatively strong credit performance and liquidity.
“Moody’s looks at the company’s strong credit metrics and good liquidity and will monitor Telkom’s performance given the prevailing economic conditions,” said Telkom.
Telkom CEO Stock Disposition
This credit rating downgrade follows Telkom disclosed that CEO Sipho Maseko sold more than R6.2 million in Telkom shares.
The divestiture was announced on the JSE Stock Exchange News Service as required by sections 3.63 to 3.65 of the JSE Listing Requirements document.
Maseko sold 87,505 shares at an average price of R32.62 on November 12, 2020, as well as 104,500 shares at an average price of R32.73 on November 13, 2020.
These two disposals amounted to R6,274,552.05 and followed the award of options in terms of the company’s share plan.
“The previous transactions were carried out in the market. The authorization to trade was received in terms of paragraph 3.66 of the Listing Requirements, ”said Telkom.
Shortly after Maseko, Telkom CFO Tsholofelo Molefe sold 82,569 shares worth R2,759 million.
Now Read: Telkom Reveals Black Friday Sales
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