Press Releases / 03.10.2014
Press Release as of 03.10.2014
CJSC AK&M Rating Agency has lowered the outlook on the national scale credit rating of Sistema Joint-Stock Financial Corporation from stable to negative. The credit rating stays at 'A++' (high credit worthiness category).
The negative outlook reflects the much higher probability of seeing JSOC Bashneft shares withdrawn from the Company and follows the placement of Sistema's major shareholder and Chairman of the Board of Directors under house arrest.
While JSOC Bashneft is currently generating about half of the holding's revenue (50.8% in the first half of 2014), the oil producer's total loan debt as of July 1, 2014 was estimated at 4.9 billion US dollars, only 31% of Sistema JSFC's consolidated debt burden. Therefore, the possible loss of this asset may negatively affect the sustainability of the group's financial profile.
That said, according to AK&M Rating Agency's estimates, even the most adverse scenario pushing up the holding's debt to EBITDA multiple from 1.9x to 2.15x (on an annualized basis) will not mean a substantial buildup of pressure on Sistema JSFC's credit rating.
Established 1993, Sistema JSFC is the largest publicly traded diversified financial corporation in Russia and the CIS with large assets in various sectors of economy.
Companies controlled by Sistema JSFC are operating in Russia, other CIS countries, East and West Europe providing services related to telecoms, hi-tech, fuel & energy, petrochemistry, radio and space technologies, banking, retail trade, mass media, travelling and healthcare to more than 100 million consumers.
In recent years, Sistema JSFC has evolved from being an operational holding company to an investment fund model.
According to Sistema JSFC's consolidated US GAAP report, its assets at the end of the first half of 2014 amounted to USD 45.2 billion, equity capital totaled USD 13.6 billion.
Full name: Sistema Joint Stock Financial Corporation.
Short name: Sistema JSFC.
The rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's creditworthiness and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.
AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.
CJSC Analysis, Consulting and Marketing Rating Agency is a leading independent national rating agency engaged in rating activities since 1993.
CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010).
CJSC Analysis, Consulting and Marketing Rating Agency
Ul. Gubkina 3, Moscow, Russia
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.