JOHANNESBURG — Moody’s Downgrades Liquid Telecom on Refinancing Risks, Flags Reliance on Zimbabwe Operations
Moody’s Investors Service has downgraded the credit rating of Strive Masiyiwa’s Liquid Telecom, now operating as Liquid Intelligent Technologies, from Caa1 to Caa2, citing heightened refinancing risks and weak underlying profitability across much of the group’s African operations.
In a note accompanying the downgrade, the ratings agency said Liquid faces significant pressure from a $620 million debt maturity due in 2026, raising concerns about the company’s ability to refinance its obligations under current market conditions.
Moody’s also highlighted the group’s heavy dependence on its Zimbabwean operations for profitability. According to the agency, when the earnings contribution from Zimbabwe is excluded, the remainder of Liquid’s regional businesses generate only marginal profits, which are insufficient to cover interest payments on existing debt.
“The group’s credit profile remains constrained by high leverage, weak liquidity and ongoing refinancing risk,” Moody’s said, adding that operational performance outside Zimbabwe remains fragile.
The assessment underscores Zimbabwe’s outsized role in sustaining Liquid’s wider African footprint, with the country effectively carrying the group’s profitability at a consolidated level. Analysts say this concentration risk leaves the business vulnerable to regulatory, currency and macroeconomic shocks in a single market.
Market observers note that the findings may also revive debate in Zimbabwe over the cost of mobile and data services, with some analysts arguing that strong cash flows from the local market have historically been used to support the group’s regional expansion and debt servicing. However, Liquid has previously maintained that pricing reflects infrastructure investment costs, regulatory fees and broader operating conditions.
Liquid Intelligent Technologies operates a pan-African fibre network spanning more than a dozen countries and provides data, cloud and enterprise services to corporates, governments and telecom operators. The company has positioned itself as a key player in Africa’s digital transformation agenda, but Moody’s warned that execution risk, funding constraints and high interest burdens continue to weigh on its credit outlook.
The downgrade places Liquid deeper into speculative-grade territory, signalling elevated default risk unless the group successfully addresses its refinancing needs, improves regional profitability, or secures new capital ahead of the 2026 debt maturity.
