TWO INTERNATIONAL agencies have downgraded the rating of Slovenský Plynárenský Priemysel (SPP) after the state became its sole owner on June 4. While Moody’s downgraded the issuer rating to Baa3 from Baa1 with a stable outlook, Fitch decreased the Issuer Default Ratings (IDR) in foreign and domestic currency to BBB- with a stable outlook from A-, the SITA newswire reported on June 6.
Regarding Moody’s rating, the downgrade was a result of re-assessing the business and financial risk profile of SPP after the reorganisation of the company was completed. The agency announced that SPP will not have a 100-percent approach to the cash flow of its subsidiaries, including Eustram, SPP-Distribúcia, Nafta and SPP Storage. Instead, SPP will own 51 percent of the newly established company SPP-Infrastructure, which became the holding company for new SPP-Infrastructure group. The Energetický a Průmyslový Holding (EPH) company will control the remaining 49 percent and will have managerial control at SPP-Infrastructure, as reported by SITA.
Moody’s also affirmed the Baa1 issuer rating for SPP-Distribúcia, with a negative outlook. This affirmation follows the announcement that the reorganisation process of SPP has been completed. The ultimate ownership structure, however, remains unchanged, with EPH maintaining 49 percent ownership and management control of the SPP-Infrastructure group and the Slovak government holding a 51 percent stake, Moody’s wrote on its website.
As for Fitch, in addition to downgrading the rating, it also finished its rating evaluation of the company. SPP spokesperson Peter Bednár said that it is a strategic interest following the reorganisation of SPP, according to which SPP will not use the tools, at which the rating evaluation is necessary, to finance its activities, SITA wrote.
Fitch also affirmed the IDR for SPP-Distribúcia and Eustream at A- with a stable outlook. After the SPP reorganisations, these companies are directly owned by SPP-Infrastructure, but their end ownership and control did not change. The end owners of SPP-Distribúcia and Eustream is EPH, which controls 49 percent of the stock and has managerial control, while the state has 51 percent, but without managerial control, as reported by SITA.
Compiled by Radka Minarechová from press reports
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9. Jun 2014 at 14:00