S&P lifts Enemalta to stable

Standard & Poor's said it revised the outlook on Enemalta Corp. to stable from negative.

The agency also said it affirmed the B+ long-term corporate credit rating on the company.

The outlook revision reflects an understanding that the government of Malta is working on a comprehensive restructuring of its power sector, with an aim to reduce the island's reliance on very high-cost oil-dependent electricity generation, S&P said.

As part of this restructuring, Malta is near finalization of a transaction with Shanghai Power Electric, a subsidiary of China Power Investment Corp. that will inject about €200 million in equity in return for a minority stake in Enemalta, the agency said.

The agency said an equity injection will relieve the immediate pressure on Enemalta's liquidity position and mark the start of a de-leveraging process, S&P said.

Nevertheless, under the base-case scenario, the agency said it still expects that Enemalta will generate negative profits and cash flows in the near- to medium-term.

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