Fitch: Petrol AD on watch

Fitch Ratings said it has placed the B- issuer default rating and B- senior unsecured rating of Petrol AD for its €100 million of notes due in 2011 on rating watch negative.

The rating action is driven by concerns over a sizeable share repurchase undertaken by the company in Q208, which was not in accordance with the planned use of proceeds from the asset disposal to Lukoil Bulgaria, and concerns that the management is not acting consistently with its strategy as laid out to Fitch earlier this year, according to the agency.

Fitch noted that the share repurchase of BGN90.7 immediately benefits shareholders to the detriment of bondholders.

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