Fitch Places TNK-BP On Rating Watch Negative On Rosneft's Acquisition
October 25, 2012 Fitch Ratings
Fitch Ratings-Moscow/London-24 October 2012: Fitch Ratings has placed TNK-BP International Ltd.'s (TNK-BP) Long-term foreign currency Issuer Default Rating (IDR) of 'BBB-', and all other ratings, on Rating Watch Negative (RWN). This rating action follows the announcement of the likely acquisition by OJSC OC Rosneft (BBB/RWN) of a 100% interest in TNK-BP.
The RWN indicates that, while Fitch does not currently anticipate a downgrade to TNK-BP's rating, there remain many uncertainties about the structure, funding and execution of the transaction, the financial profile of an enlarged group and TNK-BP's bondholders' rights therein. The agency considers that in the short run the downside risk outweighs upside potential, although Fitch recognises the transaction could improve TNK-BP's credit profile in the long run.
The agency expects to resolve the RWN as the details of the transaction become clearer – probably in the next six months.
TNK-BP International Ltd. is a BVI-registered parent of a number of exploration and production, refining and marketing companies with assets and operations primarily in Russia and Ukraine. TNK-BP is one of the largest vertically integrated companies in Russia and has the third-largest hydrocarbons reserves and production volume in the country. Existing ownership and control is divided between BP plc ('A'/Positive), with a 50% stake, on one side and Alfa Group (25%), Access Industries (12.5%) and Renova (12.5%), collectively referred to as AAR, on the other. Both shareholders recently announced their agreements to sell their entire interests in TNK-BP to Rosneft.
Company — RN Holding
Full nameOpen Joint Stock Company RN Holding
IndustryOil and gas