S&P cuts DTEK Renewables

S&P said it lowered its long-term issuer credit rating on DTEK Renewables to CCC+ from B-.

“Ongoing construction of the Tiligul project has exhausted DTEK Renewables' liquidity cushion. We understand that DTEK Renewables remains committed to constructing its large 498 MW Tiligul wind power project by October 2022, to take advantage of favorable green tariffs. We believe the project can present liquidity risks during construction and might indicate a relatively aggressive financial strategy,” the agency said in a press release.

DTEK plans to finance the project, which has a total expected cost of €578 million, with operating cash flow and short-term sourcing; no additional long-term financing has been contracted, the agency said.

S&P noted that DTEK has not yet received Ukrainian hryvnia (UAH) 3 billion (about €97 million) in historical arrears from its guaranteed buyer that were supposed to be settled with the proceeds from the recent Ukrenergo $825 million eurobond issue.

“We see heightened risks for receivables collection because of the energy crisis in Ukraine and the recent statement of Ukraine's President Zelensky accusing DTEK Renewables' ultimate owner, Rinat Akhmetov, of potential participation in an attempted coup d'etat (which he denies),” S&P said.

The outlook is stable.

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