S&P rates PingCoal BB-

S&P said it assigned BB- ratings on Pingdingshan Tianan Coal Mining Co. Ltd. (PingCoal) with a stable outlook.

The rating reflects a view that PingCoal is a core subsidiary of China Pingmei Shenma Energy & Chemical Group Co. Ltd. (Pingmei Shenma).

The agency said the parent company will be the key driver of PingCoal's credit profile.

S&P said it views Pingmei Shenma as a government-related entity due to its ownership by the Henan State-owned Assets Supervision and Administration Commission (Sasac).

The agency said it expects the group to benefit from a high likelihood of receiving extraordinary support from the provincial government based its very strong link with the Henan government.

The government has significant influence on the group's strategy and performance targets, S&P added.

The group's coal mining and chemicals businesses are expected to contribute 75% to 80% of the group's gross profit over the next 24 months, the agency said.

But the company's coal mining operations will remain geographically concentrated and limited in scale, S&P said.

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