dtek.com
Fitch Ratings has downgraded Ukraine-based DTEK Energy B.V.'s (DTEK) Long-term Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'C', the agency reported in its statement, saying that the company is in the payment default under several bank loans due to uncured expiry of the grace period on some bank debt.
"Fitch understands from the company that the grace period under most of DTEK's bank loan installments with a total principal amount of UAH14.3bn ($528m) due in end-February 2016 has passed. DTEK failed to make principal payments due in end-February 2016, with some banks lenders subsequently issuing the company with a reservation of rights letter," the agency's statement reads.
The rating downgrade to 'RD' reflects Fitch's opinion, that an issuer has experienced an uncured payment default on a loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating, according to the report.
DTEK intends to negotiate a rescheduling of bank loans maturities and its eurobonds within several months, Fitch said.
DTEK continues to be exposed to high foreign currency fluctuations risk, as most of its debt is denominated in foreign currencies, i.e. U.S. dollar (58.2% of total debt at end-2015), euro (19%), rouble (17.6%). This contrasts with 6% of its revenue in U.S. dollar in 2015, while most of its remaining revenue is denominated in hryvna. An increase of economic and political uncertainty in Ukraine has led to significant hryvna devaluation against major currencies, according to the report.