Fitch: Mazeikiu Nafta still on positive watch

Fitch Ratings said it kept Lithuania-based Mazeikiu Nafta AB's issuer default rating of B+ on rating watch positive despite Thursday's fire at its Mazeikiai refinery. The company's short-term rating was affirmed at B.

The positive watch reflects the company's pending ownership change as a result of Polski Koncern Naftowy Orlen SA's (rated BBB, rating watch negative) planned acquisition of the company.

Fitch said the fire, while unfortunate, does not presently warrant a rating action as the agency expects the company to substantially cover reconstruction costs and business disruption losses via insurance claims.

The fire has, however, caused significant damage to the refinery and the company is likely to operate well below its full capacity for several months and its profitability will likely deteriorate.

Fitch said the company will most likely have to declare "force majeure" and suspend a significant part of its refined products exports due to lower fuel production.

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