Fitch shifts Golden Energy view to stable

Fitch Ratings said it revised the outlook on Golden Energy and Resources Ltd. to stable from positive and affirmed the long-term issuer default rating at B+. The agency also affirmed GEAR’s senior unsecured dollar-denominated bond at B+ with a RR4 recovery rating reflecting an average recovery prospect.

“The outlook revision reflects Fitch’s expectation that GEAR’s scale of EBITDA will be lower than previously expected under Fitch’s recently lowered long-term coal price assumptions (see Fitch Ratings Updates Mid-Cycle Metals and Mining Price Assumptions, dated 6 November 2019). This is despite the company’s on-track production volume ramp-up,” said Fitch in a press release.

The agency calculates GEAR’s EBITDA and credit metrics with proportionate consolidation of its 67%-owned key subsidiary PT Golden Energy Mines Tbk. Fitch said it doesn’t expect GEAR’s adjusted EBITDA to rise above $150 million before 2022.

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