Rating agency reduced the reputation of the state company from B+ to CCC+ due to lack of liquidity and dependence on external financing. MEF assures that it will continue supporting Petroperú.
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Fitch Ratings lowered Petroperú’s credit rating to CCC+ as it faces a serious liquidity crisis, and they assure that the money it is expected to generate in 2024 will not be enough to cover its debt payments.
Previously, The state company had a B+ issuer default rating in local currency, and with Fitch’s new decision, it went from the highly speculative range to substantial risk.
The news comes hours after the MEF acknowledged to Fitch that they were going to continue financially supporting Petroperú to regain its sustainability. Likewise, the Minister of Energy and Mines, Rómulo Mucho, insisted that it will be necessary to continue supporting Petroperú in the face of the credit rating downgrade.
Fitch argues that the Government’s assistance to Petroperú has only addressed immediate needs for the continuation of the company’s operations but not for long-term improvements to the capital structure. The rating agency points out that the State responded lukewarmly to Petroperú’s request for US$2.5 billion by only giving it US$800 million via Banco de la Nación and raising the existing guarantees to US$1.0 billion.
They even maintain that Petroperú experiences a monthly cash consumption rate close to US$200 million while the New Talara Refinery remains non-operational, leading to a projected deficit of US$280 million despite receiving a US$800 loan. million at the beginning of the year. Such liquidity stress could result in its rating being downgraded from CCC+ to CC (extremely speculative and one step away from default).
Trained at the Jaime Bausate y Meza University. In constant learning. Economics is the branch of journalism closest to the people and my duty is to be a bridge to information.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
