Location: Home > News > Fitch removes oil firm PKN Orlen from rating watch negative

Fitch removes oil firm PKN Orlen from rating watch negative

  • Description

Date: 2010-03-08 12:36

International credit-rating agency Fitch Ratings has removed long-term foreign and local currency issuer default ratings (IDRs) of Poland's biggest oil firm PKN Orlen, at BB+, from rating watch negative, where they were placed on Sep 2, 2009, due to projections of a substantial erosion of PKN's credit metrics; now Fitch has affirmed the two ratings and assigned negative outlooks to them. It also affirmed short-term foreign and local currency IDRs at B.


The rating action reflects PKN Orlen's reduced risk of a material deterioration of its credit profile amid a deep downturn in the refining and petrochemicals industry as the company managed to considerably lower its net debt in Q4/2009. 

Working capital optimisation, in particular the extension of payments for some crude oil supplies and factoring of trade receivables together with better than expected cash flow from investments, partly driven by one-off events, resulted in a 25% reduction in net debt during Q4/2009 to PLN10.3bn at end-December 2009, the agency notes. 

Following a recent management meeting with PKN, Fitch believes that positive working capital changes that occurred in Q409 may be regarded as sustainable for 2010, it concludes.

tom