Fitch affirms Petkim bonds rating

Baku. 30 January. REPORT.AZ/ Fitch Ratings has assigned Petkim Holding senior unsecured $ 500 million 5.875% bond due 2023 a final foreign-currency senior unsecured rating of 'B'/'RR4'.

Report informs, the agency says the rating is aligned with Petkim Holding Issuer Default Rating (IDR). Supports for Petkim Holding rating include a well-invested asset base and a strong position in the growing Turkish chemical market.

The commissioning of the STAR refinery in 2018 will improve Petkim Holding cost structure and help mitigate headwinds by the Holding, and support positive free cash flow generation and gradual deleveraging after 2018.

The agency states that Petkim Holding sells approximately 64% of its products to the domestic market, with the remaining 36% exported mainly to Europe. Demand for petrochemicals products in Turkey grew at a compound annual rate of 6.6% from 2012 to 2016 and is expected to grow at a compound annual rate of 7% between 2016 and 2023. Petkim Holding plans to add capacity in its speciality chemical products division, with expansions coming onstream in 2018 and 2019.

Petkim Holding expects to save USD70 million annually on logistic costs after STAR refinery is commissioned.

Bond proceeds of the Holding to be used to finance an 18% stake purchase in the STAR refinery.