S&P puts Fortum on watch

S&P said it placed Fortum Oyj’s and susbsidiary Uniper SE’s BB ratings on CreditWatch with negative implications.

“Amid the Russia-Ukraine conflict, we see significant risks to Fortum group's financials from the heightened risk of disruption to its natural gas procurement from Russian gas giant Gazprom, which supplies about 50% of the company's annual total of about 370 terawatt-hours (TWh),” S&P said in a press release.

The agency said it also sees the Fortum group being unable to transfer any earnings from its Russia-based operations, which could mean a 20% drop in EBITDA contributions, citing recently introduced Russian capital controls

“The CreditWatch placements reflects the possibility that we could downgrade Fortum and Uniper in case of significant gas market disruptions. We aim to resolve the CreditWatch in the coming months, depending on the evolution of market and geopolitical conditions and how resilient both companies are to them,” S&P said.

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