For the risk rating, this bankruptcy process requested by Telefónica is “similar to a breach given the weak financial profile of the company.”
Like other agencies, Fitch Ratings reduced the rating of breach of the sender (IDR) in foreign and local currency of Telefónica del Perú, going from ‘B-‘ a ‘C’. In the same way, he reduced his classification of senior bonds not guaranteed to ‘C’, with a recovery score held in ‘RR4’, having been previously assigned as ‘B-/RR4’.
This decrease is due to the recent announcement of the telecommunications company to initiate an ordinary bankruptcy procedure (PCO) before the National Institute for the Defense of Competition and Intellectual Property Protection (INDECOPI)in order to rearrange their debts and strengthen their operation.
For Fitch, this application is “a process similar to a breach given the weak financial profile of the company and its inability to fulfill its future financial obligations.” In that line, they consider that this ordinary bankruptcy procedure will take several months to be accepted and completed.
Similarly, they notice that compliance with the payment of the international bonus that expires on April 10 of this year will be unlikely, for an amount greater than S/600 million, due to its fragile financial situation. “The payment of the bonus remains uncertain since the support of the shareholders does not include the payment of the bonus fee,” they said.
Remember that this is not the only qualification reduction that Telefónica has had. Moody’s Local Peru and Support & Associates They also formulated a similar measure.
Telefónica del Peru could be liquidated
Telefónica does not see the possibility of fulfilling its financial obligations. During the past year, it reported net losses of S/3,391.59 million, that is, an increase of 452.83% compared to the previous year. Given this situation, the Spanish capital company requested that an ordinary bankruptcy procedure be initiated for its patrimonial restructuring.
It has two paths: that the aforementioned or that is aimed at liquidating the company is accepted. The decision will fall to the Board of Creditors that will evaluate a rearrangement plan for the recovery of its credits.
Source: Larepublica
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