Baku, Azerbaijan, Jan. 12
By Rauf Guliyev – Trend:
Turkey’s Petkim Petrokimya Holding A.S. (Petkim) is looking to issue a $500 million bond in order to purchase an 18 percent stake in the STAR refinery from its shareholder, SOCAR Turkey Energy A.S. (STEAS), Moody's Investors Service said.
“The purchase price of $720 million implies that the company will also utilize a material portion of its cash balance for the acquisition,” Moody's said. “Once operational in Q4 2018, the refinery will provide feedstock to Petkim.”
“Petkim's current liquidity is adequate to meet its ongoing obligations,” Moody's said. “However, we forecast that the company's liquidity position will weaken following the purchase of the STAR refinery stake.”
“From 2018 onwards, investment capex is forecasted to be minimal while a major scheduled turnaround in 2018 will require about $60 million of maintenance capex,” Moody's said. “In 2019, maintenance capex is expected to be less than $30 million.”
Moody's Investors Service has today assigned a B1 corporate family rating (CFR) and B1-PD probability of default rating (PDR) to Petkim, the sole petrochemical producer in Turkey.
Petkim's B1 CFR reflects (1) the company's strong position in the growing Turkish petrochemical market; (2) anticipated on-going cost savings and synergies that will be realized once the STAR refinery becomes operational in Q4 2018; and (3) the strategic importance of Petkim to State Oil Company of the Azerbaijan Republic (SOCAR) (Ba2 stable), which remains a supportive shareholder.