S&P: Georgian Oil to negative

Standard & Poor’s said it revised the outlook on Georgian Oil and Gas Corp. to negative from stable.

The agency also said it affirmed the company’s B+ long-term and B short-term corporate credit ratings.

The outlook revision primarily reflects the revision of the company’s base-case scenario, S&P said.

The company is now contemplating increasing its investments in 2016 through 2017, the agency explained. Having successfully completed construction of the Gardabani thermal power plant in late 2015, Georgian Oil is currently considering investing into an extension of this project, estimated at $200 million to $250 million, S&P said, and constructing an underground gas storage facility worth another $250 million.

This will require an increase in debt financing and means that the company might be able to de-leverage only if both projects are successfully launched, which will not happen before 2018, the agency explained.

The company’s financial risk profile is constrained by its relatively high leverage, expected volatility of cash flows during stress periods and sizable investments required to finance its growth projects, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.