Power utility Eskom was dealt another blow on Wednesday when ratings agency S&P Global announced a further downgrade of Eskom’s credit rating with a negative outlook.

S&P announced that it “lowered its long-term foreign and local currency issuer credit ratings on South Africa-owned utility ESKOM Holdings SOC Ltd. to ‘CCC+’ from ‘B-‘.

“At the same time, we lowered our long-term South Africa national scale rating on Eskom to ‘zaB’ from ‘zaBB-‘, and affirmed our ‘zaB’ short-term national scale rating.”

In its statement, S&P says 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.

“We now believe there is a lower likelihood that Eskom would receive extraordinary support from the government, reflecting our view that government support for the utility over the past few months has been insufficient given that the utility’s liquidity concerns persist.

“We are therefore downgrading Eskom to ‘CCC+’ and ‘zaB’ from ‘B-‘ and ‘zaBB-‘.

The agency said the negative outlook points to uncertainty regarding the extent and timelines of government support for Eskom over the coming six months, considering the magnitude of the utility’s funding deficit and refinancing risks.

Listen: S&P’s Eskom downgrade ‘not surprising’

Moneyweb earlier reported that Eskom has run out of cash and had to make two payments totalling R20 billion during February.

This came after funders closed their wallets out of concern for apparent corruption and governance failures at Eskom.

Government appointed a new board and some senior executives associated with corruption have left the utility. Applications for a new CEO and CFO have closed.

Eskom obtained bridging finance from the Public Investment Corporation (PIC), but no solution has yet been communicated beyond the PIC loan.

Read: GEPF to provide R5 billion loan to Eskom

The utility’s position will be even worse from April 1, when the 5.23% tariff increase granted by energy regulator Nersa kicks in. The increase amounts to a decrease in real terms as 4 percentage points of the increase is a pass through for Eskom’s obligations to pay for renewable power from independent power producers.

Former finance minister Malusi Gigaba has described Eskom as the biggest risk to the south African economy. Government has provided R350 billion of guarantees to Eskom which could be called upon if Eskom defaults.

The downgrade by S&P would make it even more difficult for Eskom to find funding and if it does, it would increase the cost.

Read: Eskom’s dollar bonds fall after S&P downgrade