The rating agency Apoyo & Asociados (A&A), linked to Fitch Ratings, stressed that when the New Talara Refinery (NRT) reaches its optimal operation, Petroperú’s refining margins would improve significantly as a result of the greater flexibility of the cost structure and the increase in revenues, given the large load and production of derivative products of greater economic realization.
“The classifier hopes that, With the NRT operating, the leverage levels will decrease as a result of the higher cash generation due to the recovery of the operating margins. Likewise, these flows from the start-up would help the company to repay the debt contracted in recent years and reduce its need for government support,” A&A highlighted in its report.
Likewise, the rating agency Apoyo & Asociados specified that it is important that Petroperú reverse the deterioration that it has shown in its performance, which reduced its cash generation capacity and weakened its operation. In this way, as part of the actions that must be carried out, is the presentation of a restructuring plan to reinforce the governance and financial sustainability of the state oil company, as well as its operations.
It is important to mention that said restructuring plan must be submitted to the general meeting of shareholders at the latest on July 31 of this year, which has been developed by the international specialized consultant Arthur D. Little LLC in consortium with Columbus HB Latam.
Finally, the classifier indicated that “the company is in an advantageous position related to the low probability of having competition from new refineries, since the refining industry presents high entry barriers, due to the high levels of investment required for its operation and the presence of economies of scale”.
Source: Larepublica
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