Fitch Ratings affirmed Samruk-Energy's long-term foreign and local currency credit rating of “BB”, and also raised Samruk-Energy's solvency on an independent basis from “B” to “B +” and the rating for unsecured loans from “BB-” to "BB". The outlook is “Stable”.
Raising of creditworthiness on a stand-alone basis is connected with a stronger financial profile owing to improved credit indicators and reduction of Company's currency risks. Increasing of priority unsecured ratings of the Company is because of less structural subordination for unsecured lenders.
Affirmation of ratings resulted from considerable reduction of the Company’s currency fluctuations after refinancing of US dollar loan at the Moynak HPP in local currency at the holding company level, as well as converting the loan in US dollars into local currency. At the end of 2019, foreign currency debt amounted to only 2%, compared to 60% in 2016. Thus, as the Agency notes, the Group increased its financial flexibility and ability to stand against currency shocks.
The affirmed rating includes the Agency’s opinion that the Group will receive individual capacity tariffs for new power units of Shardarinsk HPP, Moynak HPP and Almaty Power Plants until 2024-2028.
Along with a boost in the Company's income, the Agency noted a substantial debt reduction and, as a result, improved financial performance. Furthermore, an increase in the share of international financial institutions in the structure of the loan portfolio of the Company from 30% to 42% was marked out, which shows the high quality of the debt portfolio and significantly influences the assessment of the financial performance of the Group. At the same time, the Company plans to work closely with international lenders.
The company is 100% state owned. Samruk-Energy accounts for about 30% of electricity generation and about 40% of the country's total coal production in 2019. Evaluation of the socio-economic consequences of a potential default of Samruk-Energy as moderate reflects the Agency's view that most of operations of subsidiaries will continue if the parent company cannot meet its obligations.
In addition to that, the Agency notes that Samruk-Energy has sufficient liquidity and cash to meet its short-term obligations in full.
Reference:
“Samruk-Energy” JSC is the largest power holding company in Kazakhstan, 100% owned by “Samruk-Kazyna” SWF JSC. It was established in 2007. Core business: electricity and heat production; transmission, distribution and sale of electricity, power coal mining. The holding company comprises energy and coal enterprises, including “Ekibastuz SDPP-1” LLP, “Ekibastuz SDPP-2 Plant” JSC, “Bogatyr Komir” LLP, “Almaty Power Plants” JSC, “Moynak Hydropower Plant named after U.D. Kantayev” JSC, “Shardarinsk HPP” JSC, etc.
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Government Relations and Communications Office of “Samruk-Energy” JSC.
Tel: (7172) 55-30-62;