Fitch: Kazakhstan Utilities Face Growing Negative Dynamics
We estimate that most of the companies' standalone profiles and credit metrics have limited headroom to mitigate the economic slowdown, due to weakened financial profiles. We also believe that Kazakh utilities' extensive capex programmes, which are mostly debt-funded, may face funding challenges in the current market conditions.
As the ratings of the largest Kazakh utilities as KEGOC (BBB+/Stable), Samruk-Energy (BBB-/Stable) and smaller Ekibastuz GRES-1 (BB+/Stable) and MEDNC (BB+/Negative), incorporate state support, potential privatisation and subsequent weakening of state support may lead to a review of companies' ratings to reflect standalone financial and operational profiles. In some cases, this may result in negative rating actions.
The full report, 'Kazakhstan Utilities 2016 Outlook: Increasing Negativity', is available on www.fitchratings.com or by clicking the link above.