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Moody's downgrades the credit rating of Liquid Intelligent Technologies
23 hrs ago |
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Moody's Investors Service has downgraded the credit rating of Liquid Intelligent Technologies, formerly Liquid Telecom, from Caa1 to Caa2, citing heightened refinancing risks and growing pressure on the group's financial position.
In its assessment, Moody's highlighted that Liquid faces a major debt repayment challenge, with about US$620 million falling due in 2026. The ratings agency warned that the size and timing of the obligation expose the company to significant refinancing risk, particularly in an environment of tight global credit conditions and elevated borrowing costs.
Moody's also pointed to the central role played by Liquid's Zimbabwe operations in sustaining the group's overall profitability. According to the agency, Zimbabwe remains one of the few consistently profitable markets within Liquid's African footprint. When the contribution from Zimbabwe is excluded, the remainder of the group's operations generate only marginal profits, which are insufficient to comfortably service interest payments on existing loans.
This assessment suggests that Zimbabwe is effectively subsidising Liquid's wider African operations, carrying a disproportionate share of the financial burden within the group. Analysts say this dynamic raises concerns about the sustainability of the current business model and the pressure it may place on operations in stronger-performing markets.
The downgrade has also reignited debate around high data prices in Zimbabwe. Observers argue that the need to extract higher revenues from profitable markets such as Zimbabwe could partly explain the persistently high data charges faced by consumers, as the group seeks to shore up cash flows and meet its debt obligations.
While Liquid has not yet publicly responded to the downgrade, the Moody's report underscores the financial strain facing one of Africa's largest telecoms and data service providers, as well as the broader implications for consumers and regulators in markets that are effectively propping up the group's balance sheet.
In its assessment, Moody's highlighted that Liquid faces a major debt repayment challenge, with about US$620 million falling due in 2026. The ratings agency warned that the size and timing of the obligation expose the company to significant refinancing risk, particularly in an environment of tight global credit conditions and elevated borrowing costs.
Moody's also pointed to the central role played by Liquid's Zimbabwe operations in sustaining the group's overall profitability. According to the agency, Zimbabwe remains one of the few consistently profitable markets within Liquid's African footprint. When the contribution from Zimbabwe is excluded, the remainder of the group's operations generate only marginal profits, which are insufficient to comfortably service interest payments on existing loans.
This assessment suggests that Zimbabwe is effectively subsidising Liquid's wider African operations, carrying a disproportionate share of the financial burden within the group. Analysts say this dynamic raises concerns about the sustainability of the current business model and the pressure it may place on operations in stronger-performing markets.
The downgrade has also reignited debate around high data prices in Zimbabwe. Observers argue that the need to extract higher revenues from profitable markets such as Zimbabwe could partly explain the persistently high data charges faced by consumers, as the group seeks to shore up cash flows and meet its debt obligations.
While Liquid has not yet publicly responded to the downgrade, the Moody's report underscores the financial strain facing one of Africa's largest telecoms and data service providers, as well as the broader implications for consumers and regulators in markets that are effectively propping up the group's balance sheet.
Source - online
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