Moody's: Stirol outlook stable

Moody's Investors Service said it changed the outlook on OJSC Concern Stirol's B3 corporate family and bond ratings to stable from negative.

The change reflects a substantial removal of liquidity and default concerns that arose from cash flow uncertainties and a breach of covenants in 2006-2007 that subsequently have been waived by the lenders, the agency said.

Large increases in natural gas prices in 2006 and 2007 had a substantial negative effect on the cost position of Stirol, but Moody's said the company is addressing changing market conditions through a prompt adjustment of the product mix, a greater focus on energy efficiency, investments into production technology to minimize gas consumption and a renewed focus on increasing the share of higher value-added and non-fertilizer products in the output mix.

The agency noted that global ammonia and fertilizer markets continue to enjoy a long-term cyclical upturn, while the revival of the Ukrainian agricultural market is expected to reinforce the demand for nitrogen fertilizers.

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