Close photo mode

    Rating of 'Azerenergy' OJSC may be reduced - UPDATED

    The company's credit reports confirmed as negative

    Baku. 12 January. REPORT.AZ/ Standard & Poor's Ratings Services today placed its 'BBB-' long-term and 'A-3' short-term corporate credit ratings on vertically integrated Azerbaijan-based electricity utility Azerenerji JSC on CreditWatch with negative implications.

    The state's track record of support to Azerenerji includes equity injections, debt guarantees, direct state borrowings, asset transfers, low-interest-rate loans, and financial aid provisions. Although Azerenerji is subject to various taxes, the government has a history of approving tax payment delays for the company.. In addition, Azerenerji's payables of about US$2.0 billion to the sole fuel provider, state-owned State Oil Company of Azerbaijan Republic (SOCAR), were written off with the government's consent in 2010. In the same year, Azerenerji's receivables of a similar amount from other state companies were also written off.

    The agency assumes a 4%-5% increase in revenues on the back of power volume growth in 2016 so that the

    annual capital expenditures will be about AZN100 million-AZN120 million; and

    State equity injections.

    Based on assumptions, company arrive at the following credit measures:

    EBITDA of AZN220 million-AZN 240 million;

    Funds from operations (FFO) of about AZN 150 million-AZN 170 million;

    Debt to EBITDA of about 9.0x; and FFO-to-debt below 10%.


    International rating agency "Standard & Poor's" (S&P), has confirmed long-term credit rating of "Azerenergy" OJSC as "BBB-", short-term corporate rating as "A-3", and the outlook as "negative".

    Report informs the agency associated 81% of the debt of "Azerenergy" with exposure to currency risk.

    "S&P" reduced independent credit profile of "Azerenergy" JSC from "b" to "CCC +" - and the reason for this is significant increase in leverage ratio, and non-durable capital structure.

    In addition, the "Azerenergy" has negative credit reports and in case of need for the state's emergency assistance the company's rating may be reduced.

    If you find out orphographic mistake in the text, please select mistaken part of the text and press Ctrl + Enter.

    Last added

    At least one category must be selected

    All news

    Orphus sistemi