Fitch might lift Kaztel, Kcell

Fitch Ratings said it placed Kazakhtelecom JSC (Kaztel) and Kcell JSC on rating watch positive after Kaztel signed an agreement to acquire a 75% equity stake in Kcell.

The acquisition of a controlling 75% stake in Kcell allows Kaztel to become a key mobile player in the Kazakh mobile market by controlling more than 60% mobile subscribers domestically, the agency said.

“We view this acquisition as significantly improving Kaztel's operating profile and market position while a related spike in leverage may only be short-lived as we expect the company to deleverage to below 2.5x funds from operations (FFO) adjusted net leverage by end-2020,” the agency said in a news release.

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