Fitch puts Kuwait Energy on evolving watch

Fitch Ratings said it placed Kuwait Energy plc's long-term issuer default rating of CCC on Rating Watch evolving following news of its proposed acquisition by United Energy Group Ltd.

The company's $250 million 9½% notes due in 2019, which are rated at CCC with recovery rating of RR4, also were placed on evolving watch.

Kuwait Energy's standalone CCC rating is driven mainly by its weak liquidity position, Fitch said.

The proposed acquisition comprises an equity consideration of $491 million, plus the assumption of Kuwait Energy's outstanding debt.

The evolving watch is predicated on the short-term liquidity risk should the deal fail to complete without alternative sources of funding in place to repay Kuwait Energy's $250 million notes, Fitch said.

Given United Energy's absence of borrowings at year-end 2017 and its expressed intention to assume Kuwait Energy's debt, the agency said it views the refinancing risk associated with the change of control provision under the $250 million notes as low, should the deal complete.

© 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.