Fitch may downgrade Petrol

Fitch Ratings said it placed on Rating Watch negative Petrol AD's B- €100 million notes due 2011 and its B- issuer default rating. The recovery rating for the notes has been affirmed at RR4.

The agency said the placement of the ratings on watch reflects a covenant breach on the €100 million bond issue, along with the company's deteriorated liquidity position and higher-than-expected leverage.

The ratings also reflect the group's weak corporate governance, weak financials and below-average profile due to its small size and exposure to a single country, Fitch said.

As the end of 2006, the company's ratio of adjusted net debt to EBITDAR was at 5.5 times, up from 3.3 times the previous year.

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