Moody's downgrades Rolf

Moody's Investors Service said it cut JSC Rolf's (Rolf Group) corporate family and probability of default ratings to B1 and B1-PD from Ba3 and Ba3-PD, respectively. Concurrently, it placed all the ratings on review for further downgrade. The agency revised the outlook to under review from stable.

The downgrades and review follow the news that on Nov. 24, the general prosecutor's office issued a claim against the former owner of Rolf and the company making them liable to pay RUB 12.85 billion, the agency said.

“We also understand that on Nov. 25, funds on some of the company's bank accounts were blocked as security for the claim. The first court hearing is scheduled for Dec. 14, 2021,” Moody’s said in a press release.

The claim relates to the criminal case against the former owner and the company's managers in 2019, when they were accused of transferring RUB 3.9 billion abroad under allegedly faulty documentation.

“The downgrade to B1 rating under review reflects Moody's view, that the afore-described claim which now targets not only the former Rolf owner, but the company itself as a co-defendant, creates a situation of elevated uncertainty for Rolf, that could potentially result in operating disruptions, heightened working capital requirements, and liquidity constraints stemming from potentially restricted access to attractively priced capital,” the agency said.

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