– International rating Agency Fitch maintained the Rating Watch negative the ratings of AFK Sistema and MTS, according to a press release from the Agency.
On review left by a long-term Issuer default rating (IDR) in foreign and national currency “System” to “BB -” and long-term IDR of MTS in foreign and national currency “BB+” and short-term IDR MTS “B”.
The decision was due to the continuing uncertainty as to the outcome of a trial “the System” with Rosneft.
In addition, in the list Rating Watch “negative” are senior unsecured debt rating of “the System” to “BB-” and a similar rating of the notes in the loan (LPN), issued by Sistema International Funding S. A. under the guarantee of “the System”, the ratings of senior unsecured debt in foreign and local currency MTS “BB+” and a similar rating LPN MTS International Funding Ltd., issued under the guarantee of the MTS.
The ratings were placed in the list for review in June after the court decision to freeze the assets of AFK “Sistema” in connection with a lawsuit of “Rosneft”. These assets include 31,76% stake in PJSC “MTS” 100% “meds” and 90,47% “BESK”. Also the “System” it is forbidden to make a profit on these assets, including dividends.
The amount of the claim originally 170.6 billion. In August, the court partially satisfied the claim of “Rosneft” and decided to collect from “the System” 136 billion. The decision was appealed by both parties: “the System” insists that the lawsuit is unfounded, and Rosneft expects full settlement of its claims.
Fitch intends to complete the revision of the ratings of AFK Sistema and MTS after you will get a clearer picture of the financial implications of the proceedings for the companies.