OREANDA-NEWS. December 15, 2010. The agency's experts commenting on CenterTelecom's rating pointed out that the upgrade of the rating mainly reflected the company's financial performance improvement. Standard & Poor’s was mainly concerned about CenterTelecom's liquidity and the risk of early repayment claims from the company's creditors due to its reorganization. Now the risk is eliminated as the period of such claims is expired. So the agency accessed CenterTelecom's liquidity as adequate.

Standard & Poor’s pointed out that in 2010 CenterTelecom decreased its dependence on short term loans, and its debt burden declined significantly. For instance, as of June 30, 2010, the ratio of debt to EBITDA was 0.9x, a considerable improvement from 1.7x a year ago.

According to Standard & Poor’s, among key factors supporting the company's rating were CenterTelecom's resilient market share (more than 70% of the fixed-line market), vast network in European Russia's central region, and ownership of last-mile access to 6.7 million customers.

The agency's specialists believe that CenterTelecom will continue its strong operating performance, generate positive free cash flow, and maintain adequate liquidity.

Vaagn Martirosyan, General Director, CenterTelecom, commenting the rating upgrade, said: "Given possible difficulties with liquidity due to reorganization the company was pursuing a policy of reduction of debt burden within recent 12 months. An upgrade of CenterTelecom's ratings and their removal from CreditWatch reflects successful results achieved by our company."