OREANDA-NEWS. RusRating has changed the outlook on OAO AFK Sistema’s credit rating from to “negative” to “stable” in response to a stabilisation of the situation following the transfer of ANK Bashneft to government control, including the payment of more than R50bn in compensation, which opens up new investment opportunities. The rating itself is unchanged at “AAA” on the national scale and “A-“ on the international scale.

The rating is based on a strong position in several sectors of the Russian economy, a strong operating margin, a moderate debt burden, effective management and strong backing from the Corporation’s owner, who, in RusRating’s view, has access to political support.

Constraining factors include heavy dependence on MTS, the group’s core asset.

AFK Sistema is a private-sector Russian company in which Chairman of the Board Vladimir Yevtushenkov controls a majority stake. The Corporation is Russia’s largest diversified public company, with more than a hundred subsidiary and dependent firms in a range of industries. Its principal revenue-generating asset is the mobile telecoms provider MTS. Distribution channels operate in in Russia, CIS countries, eastern Europe, the Middle East, South Asia and North Africa.

The Corporation’s debt burden is moderate. The debt’s term structure is balanced, with a significantly larger percentage of long-term obligations; the associated currency risk is elevated, while interest rate risks are moderate. Re-financing opportunities are judged strong and the operating margin is healthy. Fixed assets are the largest component of the balance sheet and are dominated by MTS. Overall risk sensitivity is moderate. Liquidity is sufficient.