“Rompetrol Group remains heavily reliant on its parent company JSC National Company KazMunayGas for financial support,” Fitch said in a statement Friday.
It said that Rompetrol’s stand-alone rating would correspond to a ‘CCC’ rating given the company’s “weak financial profile.”
Rompetrol has recently announced plans to repurchase 27% in its refining unit Rompetrol Rafinare (RRC.RO) from the Romanian government in exchange for $200 million. The transaction will be financed by KazMunayGas through a shareholder loan to Rompetrol.
“Fitch said previously that in light of the historical support provided by KazMunayGas to Rompetrol, it is likely that the latter would receive further financial support from its parent to finance such a transaction, which would have a neutral impact on Rompetrol’s rating at its current level,” the rating agency said.
Moreover, Rompetrol is expected to receive further support from its parent company to finance its growth plans abroad, including acquisition in markets that are importing diesel and gasoline, such as Turkey and Ukraine, Fitch said.
The agency said Rompetrol’s ratings could be revised upward if the company improves its financial situation by gaining higher market share in Romania or neighboring markets.
Conversely, the ratings could come under downward pressure if Rompetrol sees significant cash outflows related to operational difficulties or if KasMunayGas reduces its financial support.