22nd Aug 2019 12:38
(Alliance News) - Gold miner Petropavlovsk PLC said on Thursday that Fitch Ratings Inc has upgraded its credit rating citing a positive outlook.
Petropavlovsk reported that its long-term issuer default rating and senior unsecured rating was upgraded to B- from CCC.
Fitch said the upgrade reflected the fact that the miner's liquidity positing improved following the refinancing of a bond and its investee IRC Ltd paying back a USD57.0 million loan. The ratings agency also cited Petropavlovsk's "increased visibility for production due to the launch of the pressure oxidation hub in November".
Fitch added that the positive outlook reflects the "potential for significant deleveraging to take place by end-2020 based on higher production, lower costs, and third party concentrate increasing the utilisation of the pressure oxidation hub."
Improved corporate governance, Petropavlovsk said, also contributed to the upgrade. The company's board now consists of five non-executive members out of seven, including a non-executive chair.
Also receiving an upgrade was Petropavlovsk 2016 Ltd, the company's main financing vehicle subsidiary. The unit's guaranteed notes issued rating was boosted to B- from CCC with a recovery rating of RR4. RR4 is described as average, three grades below RR1 which represents an outstanding rating.
Chief Executive Pavel Maslovskiy said: "I am delighted that we have received an upgrade from Fitch. It recognises the strengthening of our business over the past 12 months through activities undertaken by senior management and the stability which has been brought about by a new board of directors.
"It also recognises the successful commissioning of our pressure oxidation hub which is the cornerstone of our corporate strategy and which will lead to growth in earnings before interest, taxes, depreciation and amortisation and significant deleveraging in 2020 as our capital expenditure spending programme is now largely complete."
Shares in Petropavlovsk were up 2.9% at 10.36 pence each in London on Thursday afternoon.
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