The risk classifier Standard & Poor’s (S&P) reduced Petroperú’s credit rating as a long-term debt issuer from BB to B+. It also cut its standalone credit profile from B- to CCC+.
Among other aspects, the document reveals that the state oil company is going through a moment of “weakness” due to the expense incurred by the prolonged start-up of the New Talara Refinery (NRT). However, she considers that its full operation could help her settle her accounts.
Therefore, S&P believes that, as a result of the state of the company, the chances of a structural debt reduction in 2024 appear slim. Furthermore, the clean audit of the 2022 financial statements “did not restore the liquidity or solvency of the company or its reputation in the market.”
The rating agency expects “weak or no” EBITDA for Petroperú in 2023, but above US$450 million in 2024 and 2025 once the NRT is fully operational.
Consequently, S&P continues, Petroperú’s leverage should decline to approximately 16 times after skyrocketing in 2022-2023.
Additionally, it expects EBITDA interest coverage to “approach 1.3x in 2024-2025” and free operating cash flow to remain negative in 2024.
“For now, its liquidity continues to depend on Government support until it reestablishes its access to uncommitted short-term bilateral credit lines and both the extension of the MEF loan and the implementation of other long-term credit lines are confirmed,” S&P said.
After the publication of the S&P report, Petroperú announced the management of new credit lines to settle its commitments, in addition to a “series of measures to alleviate the financial situation” and thus meet the company’s financial commitments for the current year and 2024.
Source: Larepublica
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