S&P keeps Statkraft on positive watch

Standard & Poor's said it is keeping its BBB+ long-term corporate credit ratings on Statkraft AS on CreditWatch, where it was placed with positive implications on June 30 following the publication of S&P's revised criteria on government-related entities.

Statkraft has asked its shareholder, the Norwegian Ministry of Trade and Industry, for a Norwegian krone 8 billion capital injection, alongside demands for a less aggressive dividend policy, targeting dividends between 50%-75% of net profit (from the current 75%-100%).

S&P said it expects these measures, if implemented, to strengthen Statkraft's equity by about NOK 27 billion until 2015, partly offsetting the negative effects of Statkraft's expanded investment program, which will be debt-funded.

At this point, however, it remains unclear to what extent the government is prepared to support Statkraft through the proposed measures, and S&P said it will closely monitor related developments and their ultimate implications for Statkraft's stand-alone credit profile.

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