Fitch puts ChelPipe on watch

Fitch Ratings said it placed PJSC Chelyabinsk Pipe Plant's (ChelPipe) BB- long-term issuer default rating on rating watch negative following the acquisition by PAO TMK.

“The RWN will be resolved once Fitch gains clarity on the group's new capital allocation policy and ChelPipe's operational integration, and completes its assessment of the consolidated credit profile of the combined entity and parent-subsidiary ties, the latter of which, in our view, is likely to be fairly strong,” Fitch said in a press release.

Fitch said the combined company will have a weaker initial credit profile than the stand-alone ChelPipe entity due to increased leverage and TMK's weaker stand-alone credit metrics.

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