BAKU, Azerbaijan, Mar. 10
By Nargiz Sadikhova - Trend:
JSC National Company KazMunayGas's (BBB-/Stable) diversified business profile - despite a potential spin-off of KazTransGas JSC - in combination with forecast deleveraging support its 'bb-' Standalone Credit Profile (SCP), Trend reports citing Fitch Ratings.
KazMunayGas's ratings are one notch below its ultimate parent - Kazakhstan (BBB/Stable), due to Fitch's assessment of the linkage with the state in line with our Government-Related Entities Rating Criteria.
“We do not expect a potential IPO to have a material impact on the rating as we expect the Kazakhstan government to remain the controlling shareholder,” the report said.
KazMunayGas's SCP has come under pressure as a fall in oil prices caused funds from operations (FFO) gross leverage to spike to 6.3x in 2020, the Fitch said.
“However, we look at the credit profile on a through-the-cycle basis and expect FFO gross leverage to stabilise at 4.4x in 2021-2023. The company's profile is supported by the less cyclical business profiles and lower leverage of its subsidiaries KazTransGas JSC (KTG; BBB-/Stable) and JSC KazTransOil (KTO; BBB-/Stable),” the report said.
The Fitch added that the impact of the potential KTG disposal on KazMunayGas's SCP will depend on how it is structured and the nature of the post-disposal financial profile. The business profile without KTG would be slightly less diversified but remain in line with the 'bb-' SCP.
KazMunayGas (KMG) is the Kazakhstan operator for exploration, production, refining and transportation of hydrocarbons, representing the state interests in the oil and gas industry of Kazakhstan.
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