Moody’s trims Kuwait Projects

Moody's Investors Service said it downgraded Kuwait Projects Co. (Holding) KSCP's (Kipco) corporate family rating to Ba3 from Ba2 and the probability of default rating to Ba3-PD from Ba2-PD. Concurrently, the agency lowered to (P)Ba3 from (P)Ba2 the provisional ratings assigned to the backed senior unsecured $3 billion euro medium-term note program issued by Kuwait Projects Co SPC Ltd. and to Ba3 from Ba2 the ratings on the backed senior unsecured bonds due in 2026 and 2027.

“Today's rating action reflects Moody's expectation that Kipco's market value leverage (MVL) will remain above 40%, which is higher than what the rating agency originally anticipated. This is partially driven by (1) a negative free cash flow of around $75 million in 2023; and (2) Kipco's investments in its holding companies such as Panther Media Group Ltd. (OSN), including its investment in Anghami Inc. (Anghami).

“Kipco announced in November that OSN signed a conditional binding agreement with Anghami to combine its streaming platform OSN+ with Anghami and to inject up to $50 million in Anghami for a majority stake in the company,” Moody’s said in a press release.

The agency said it also forecasts Kipco’s 2023 free cash flow will be around negative $75 million. It estimates an improvement in 2024, but FCF may remain marginally negative.

The outlook remains negative.

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