S&P affirms Petrol Ofisi

Standard & Poor's said it removed from CreditWatch and affirmed its B+ long-term corporate credit rating on Petrol Ofisi AS.

The outlook is stable.

The rating was placed on CreditWatch in September following the Turkish energy market regulator's decision to fine the company new Turkish lira 599.4 million for allegedly supplying petroleum products to unlicensed gas stations. This included fines levied against the company's subsidiary ERK Petrol AS.

The affirmation of the rating reflects a successful appeal by Petrol Ofisi to the Turkish upper court. This has resulted in a stay of execution of the payments on an 18-month installment plan the company started in December 2006 and a reduction in the fine to an estimated $10 million, the agency said. The company still is seeking to cancel the fine in its entirety. The appeal for the cancellation of the fine in the lower courts could take more than two years, S&P said.

The rating continues to reflect the company's exposure to the volatile macroeconomic environment in Turkey and lack of meaningful geographical diversification, the agency said.

The ratings are supported by Petrol Ofisi's leading market position in Turkey, the agency added, which is underpinned by logistical advantages.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.