TASHKENT, Uzbekistan, November 2. Fitch Ratings has assigned Uzbekistan’s Navoiyazot an expected long-term issuer default rating (IDR) of 'BB-(EXP)' with the stable outlook, the agency told Trend.
Fitch Ratings assigned Navoiyazot an expected long-term IDR of 'BB-(EXP)' due to its high strategic and operational ties to its parent, Uzkimyosanoat (a company that unites Uzbekistan’s chemical enterprises), reflecting strong support incentives between the entities.
The agency Navoiyazot has a Stable Outlook due to the expected continued alignment with Uzkimyosanoat and the anticipated transfer of majority ownership, supporting stable strategic and operational ties.
This alignment is subject to the anticipated transfer of majority ownership of Navoiyazot to UKS by the end of 2024. Fitch may reassess the rating criteria, potentially applying the Government-Related Entities Rating Criteria instead of the Parent and Subsidiary Linkage Criteria, if the transfer delays.
The small asset base, high leverage, limited revenue diversification, and the need for cost-efficiency investments constrain Navoiyazot's individual credit profile. Although modernization efforts are underway, including new production facilities and renewable energy projects, Navoiyazot’s limited deleveraging capacity and exposure to fluctuating energy costs continue to weigh on its financial profile.
Earlier, Fitch Ratings revised Uzkimyosanoat's Standalone Credit Profile (SCP) to 'b-' from 'b'.