Fitch upgrades ZapSib

Fitch Ratings said it upgraded PAO Sibur Holding's (ZapSib) long-term issuer default rating to BBB- from BB+.

The outlook is stable.

The upgrades reflect completion of the ZapSib polyolefin plant's construction stage ahead of schedule and on budget, Fitch explained.

The company's leverage will be maintained at lower than forecasts throughout the intensive investment cycle, the agency added.

S&P said it expects ZapSib to raise Sibur's EBITDA by about one-third from 2020 and to translate into higher margins and reduced volatility in operating cash flows through enhanced vertical integration.

Sibur also outperformed the rating cases in 2017 and 2018 with funds from operations adjusted net leverage maintained at 2x, despite significant expansionary investments, the agency said.

The stable outlook reflects a view that the de-leveraging forecast on the back of Zapsib's ramp up will provide sufficient headroom for a new greenfield project under consideration, Fitch said.

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